Russian invasion this weekend? What it means for markets.

[windytrail]

Well, I was definitely wrong up-thread about Russia not wanting to invade Ukraine.

(Some?) Russian people are are bit odd, not ready for freedom/democracy (they never had).

My wife has a Russian dear friend living in Canada, with Ukrainian husband, for like 20+ years.
She of course is shocked by what happened. But she was saying that basically this is not Putin fault (does not know whose). That some (unknown?) 3rd countries forces caused the attack. So detached from reality. No wonder that putin's propaganda works on his people :(
Isolate.

Me, coming from a country forced to be part of the eastern block got the same "brotherly" treatment back in the days, as Ukrainians are getting now. All russians, and some Ukrainians (i talked to for years) did not believe that they attacked forcefully my country. They really believed that they were our saviours and (younger) brothers.

This is unfairly singling out a certain population of people, as if Russians were less smart than others. Many Russians are protesting war in the big cities right now -- https://www.npr.org/2022/02/25/1083001481/hundreds-arrested-as-shocked-russians-protest-ukraine-attack. Would you be brave enough to stand up against an injustice, risking your freedom and life?

In reality, no matter in which country you live, there is a significant amount of the population that tends to obey authority and lacks critical thinking skills. Think of the majority of Americans supporting war with Iraq in 2003 (while a small minority protested) or people in China who fully support their government. This is not a singular Russian problem, but rather speaks to the importance of free press and critical thinking in education.

All of us are at risk of an authoritarian government, as the evolutionary traits in humans that have fostered such leaders will be present in our population for a long time to come.

[Blender Bender]

Well, I was definitely wrong up-thread about Russia not wanting to invade Ukraine.

(Some?) Russian people are are bit odd, not ready for freedom/democracy (they never had).

My wife has a Russian dear friend living in Canada, with Ukrainian husband, for like 20+ years.
She of course is shocked by what happened. But she was saying that basically this is not Putin fault (does not know whose). That some (unknown?) 3rd countries forces caused the attack. So detached from reality. No wonder that putin's propaganda works on his people :(
Isolate.

Me, coming from a country forced to be part of the eastern block got the same "brotherly" treatment back in the days, as Ukrainians are getting now. All russians, and some Ukrainians (i talked to for years) did not believe that they attacked forcefully my country. They really believed that they were our saviours and (younger) brothers.

This is unfairly singling out a certain population of people, as if Russians were less smart than others. Many Russians are protesting war in the big cities right now -- https://www.npr.org/2022/02/25/1083001481/hundreds-arrested-as-shocked-russians-protest-ukraine-attack. Would you be brave enough to stand up against an injustice, risking your freedom and life?

In reality, no matter in which country you live, there is a significant amount of the population that tends to obey authority and lacks critical thinking skills. Think of the majority of Americans supporting war with Iraq in 2003 (while a small minority protested) or people in China who fully support their government. This is not a singular Russian problem, but rather speaks to the importance of free press and critical thinking in education.

All of us are at risk of an authoritarian government, as the evolutionary traits in humans that have fostered such leaders will be present in our population for a long time to come.

True. I just put my comment when my emotions were high. Many Russians doing the right thing. Apologies.

[windytrail]

No worries....I understand this is personal for you, while for most of us here it's just an armchair discussion.

[beee]

I was wrong about my predictions too. There's no logic in invading Ukraine.
I still have family and friends in Russia. I and everybody I know is shocked.

[Juan Ponce de León]

Al Jazeera tends to be better at having people on the ground, and in this case they had a reporter at a Ukrainian port.  Russia apparently warned the Ukrainian military if they stay they'll be killed - so they left.  That reporter said 10 soldiers remained to prevent looting.  That suggests Russia is willing to avoid loss of life if possible - which also fits their stated goal of protecting Russians in Ukraine.

I just saw that report, they actually left because the Russians said they would bomb not only the base but the city as well.

[MustacheAndaHalf]

This is unfairly singling out a certain population of people, as if Russians were less smart than others. Many Russians are protesting war in the big cities right now
...
In reality, no matter in which country you live, there is a significant amount of the population that tends to obey authority and lacks critical thinking skills. Think of the majority of Americans supporting war with Iraq in 2003 (while a small minority protested)
...

The protests in Russia are even more impressive given the harsh treatment protestors can expect.  As one political commentator put it, "you have the freedom to protest, you just won't have freedom afterwards."  Hundreds of protestors came out and were arrested... and then the next day, thousands more came out, with ~1800 arrested.  Were it not for how Russia treats protestors, the numbers would be even larger.

By way of contrast, consider the US invasion of Afghanistan.  The 9/11 attacks were masterminded by Bin Laden in Afghanistan.  While Bin Laden managed to slip past the US military and into Pakistan, the war was about retaliation.  And I mention that, because the 2003 Iraq war was also about retaliation - but the data was faulty.  And unlike Putin's decision to invade, in the US more people were convinced by Colin Powell than the US President.

[Blender Bender]

Note to moderators: please kick @ilsy from the Ukraine thread or the whole forum. He is spreading Putin's lies.

https://forum.mrmoneymustache.com/off-topic/ukraine/

I cannot post on that thread Off Topic since i have < 100 posts.

There are strong mentions there of no fly zone over Ukraine imposed by NATO. This is crazy idea. This would make Russia to declare war against NATO. We must avoid it as much as we can. I'm disappointed that our forum users would even mention such crap.

[DaTrill]

QE/QT and FED rate decisions overwhelm anything, except nuclear strike, that can occur due to do a regional border dispute anywhere in the world.  Ignore panic porn, focus on earnings and rates to determine market actions.   

[svosavvy]

Hi All,

Just wanted to chime in.  Just as feared an invasion has taken place.  I am saddened and disgusted that a sovereign nation who is democratically represented has to go through this.  Especially after they did the right thing years ago by giving up their nukes.  I apologize to anyone who was loathe to have this topic in the investor section.  Needless to say the situation will remain fluid and it feels like a resolution to this situation is a long way off.  I appreciate the thoughtful insight given by others.

Update on my positions: sold nat gas (UNG) 40% gain, sold USO <20% gain, selling to close my jan 2024 leap puts $14 strike right now just had one hit at $6.50 cost basis $1.30.  Turkey bet is an outlier wait and see.  As always the VOO for me is the closest thing to a free lunch over the long haul VTSAX as well.  Stay safe out there.

[PDXTabs]

QE/QT and FED rate decisions overwhelm anything, except nuclear strike, that can occur due to do a regional border dispute anywhere in the world.  Ignore panic porn, focus on earnings and rates to determine market actions.   

Unless you shorted ERUS.

[ChpBstrd]

Wow. The Russian stock market dropped by a third today before trading was halted.

RSX is down 31% to $10.77, and has fallen 60% this year so far.
You could sell a put option at the $6 strike for $0.60 and earn 10% on your money in 32 days. RSX would have to drop yet another 44.2% from here for you to be assigned. 

I'll begrudgingly pass on that deal because I think Putin has to escalate from here or look weak. Then again that doesn't mean Russian stocks, bonds, and banks continue collapsing. Market participants failed to foresee Russia being kicked out of SWIFT but what could possibly be the next shoe to drop? Nationalization of foreign assets? Ownership bans in Western countries? Ukrainian special forces blowing up Russia's pipelines? None of these outcomes are likely in themselves, but together with the unknown unknowns and market momentum, I don't think I'll gamble at this particular point.

[PDXTabs]

I'll begrudgingly pass on that deal because I think Putin has to escalate from here or look weak. Then again that doesn't mean Russian stocks, bonds, and banks continue collapsing. Market participants failed to foresee Russia being kicked out of SWIFT but what could possibly be the next shoe to drop? Nationalization of foreign assets? Ownership bans in Western countries? Ukrainian special forces blowing up Russia's pipelines? None of these outcomes are likely in themselves, but together with the unknown unknowns and market momentum, I don't think I'll gamble at this particular point.

SWIFT is only partially blocked and Russian oil and gas has still not been sanctioned. Exxon is still operating in Russia. Things could still get much worse (or better) for Russia. At some point I expect his oligarch buddies to get tired of him. It would suck if he had an "accident."

[svosavvy]

Wow. The Russian stock market dropped by a third today before trading was halted.

RSX is down 31% to $10.77, and has fallen 60% this year so far.
You could sell a put option at the $6 strike for $0.60 and earn 10% on your money in 32 days. RSX would have to drop yet another 44.2% from here for you to be assigned. 

I'll begrudgingly pass on that deal because I think Putin has to escalate from here or look weak. Then again that doesn't mean Russian stocks, bonds, and banks continue collapsing. Market participants failed to foresee Russia being kicked out of SWIFT but what could possibly be the next shoe to drop? Nationalization of foreign assets? Ownership bans in Western countries? Ukrainian special forces blowing up Russia's pipelines? None of these outcomes are likely in themselves, but together with the unknown unknowns and market momentum, I don't think I'll gamble at this particular point.

Yeah, all that is why I closed my RSX oom (now way itm)leap put short position today.  Their market is closed today, I guess someone important getting on the phone and saying shut it down is their form of a market circuit breaker.  I figure it is better to book a -p- rather than hang out and see what tomorrow brings when that stuff will trade again.  I'm just a little guppie swimming around, made about enough for a nice weeklong vacation somewhere.  The RSX is a pretty good short proxy though.  I think it could end up getting closed down.  Its largest holdings are basically just Russo banks and oil.  Might as well hang a bullseye on it for sanctions.  I do consider reloading a short options position if it gives me a little daylight going forward. 

[svosavvy]

I'll begrudgingly pass on that deal because I think Putin has to escalate from here or look weak. Then again that doesn't mean Russian stocks, bonds, and banks continue collapsing. Market participants failed to foresee Russia being kicked out of SWIFT but what could possibly be the next shoe to drop? Nationalization of foreign assets? Ownership bans in Western countries? Ukrainian special forces blowing up Russia's pipelines? None of these outcomes are likely in themselves, but together with the unknown unknowns and market momentum, I don't think I'll gamble at this particular point.

SWIFT is only partially blocked and Russian oil and gas has still not been sanctioned. Exxon is still operating in Russia. Things could still get much worse (or better) for Russia. At some point I expect his oligarch buddies to get tired of him. It would suck if he had an "accident."

That is an interesting power dynamic you mention.  Kinda seems like the mob.  If you are a single oligarch that steps out of line you will get fed the "poison pill" clause.  If the Ollies band together... you never know.

Kinda like Sauron and his Ring Wraiths.

[Travis]

https://www.reuters.com/article/ukraine-crisis-russia-cenbank/russian-c-bank-orders-to-suspend-payments-on-securities-held-by-foreigners-document-idUKL8N2V3815

What does this mean?

The Russian central bank ordered depositories and registries operating on the securities market to temporarily stop executing orders to write down securities held by foreign companies and private persons from Monday, a document seen by Reuters showed.

The document, confirmed by two independent sources, also said the central bank ordered to temporarily suspend payments on Russian securities towards foreign companies and private persons from 0900 GMT on Feb 28.

[time is money]

That means if you are not resident of Russia and have invested in russian companies - you can not sell them. For example if you would have invested in Gazprom through russian stock exchange - you are not allowed to sell your investment. That doesn’t apply to russian securities bought on foreign stock exchanges (ADRs).

Russian stock exchange is closed anyways for all trading since yesterday. But even when it reopens - non-residents won’t br able to sell their investments.

[ChpBstrd]

It sounds to me like they are defaulting on their debts.

But this doesn’t make sense given the size of Russian reserves set aside for just this type of event. They shouldn’t be insolvent. Could they be defaulting per an order from the top?

[Travis]

It sounds to me like they are defaulting on their debts.

But this doesn’t make sense given the size of Russian reserves set aside for just this type of event. They shouldn’t be insolvent. Could they be defaulting per an order from the top?

Allegedly they can keep up current levels of spending for about two more weeks, so this may be a move to stretch every penny they have.  I had a feeling that finance announcement was saying "don't pay people who we owe money to" in some fashion.  If I had a lot of money tied up in Russian ventures and just learned that I'm not getting payments or dividends for several months, I'd probably pull out of whatever deal I had going at the first opportunity.

[MustacheAndaHalf]

The Russian military has a line of vehicles dozens of miles long headed for Kyiv.  Given their willingness to shell civilian buildings in another city, things could get worse for civilians if Russia surrounds Kyiv.  So this could get worse... but I don't know if Europe will relent to US suggestions of tougher sanctions - it should really be Europe's choice, since sanctioning oil hurts them much more than the US.

I think markets are still wrestling with Ukraine & Russia's importance to world markets, and the impact sanctions will have.  But I assume existing news has been priced in.  If there's no more bad news, that could mean no more price drops.  But given the volatility of markets, that's very difficult to say... maybe 1 in 4 chance?  And probably a greater chance for more bad news, and some chance markets go sideways while digesting what has happened so far.

[FIRE Artist]

This is an interesting article that lists the market impacts of past conflicts.

https://www.investopedia.com/solving-the-war-puzzle-4780889


I really like the table in this article:

https://inspiredinvestor.rbcdirectinvesting.com/en/di/hubs/now-and-noteworthy/article/heres-how-markets-have-reacted-to-conflict-historically/kwe96epq

And in summary:

"market declines tend to be short, lasting 5-11 days on average, depending on the situation
the actual change in the market is relatively benign, and often more muted than what investors might believe
Again, while past reactions don't determine what will happen in the future, they can provide some context to help us boost our resiliency as investors when markets are volatile."

[PDXTabs]

The Russian military has a line of vehicles dozens of miles long headed for Kyiv.  Given their willingness to shell civilian buildings in another city, things could get worse for civilians if Russia surrounds Kyiv.  So this could get worse... but I don't know if Europe will relent to US suggestions of tougher sanctions - it should really be Europe's choice, since sanctioning oil hurts them much more than the US.

But does the EU care if the US sanctions Russian oil? Does the EU even need Russian oil (I understand that they really want natural gas)?

[MustacheAndaHalf]

The Russian military has a line of vehicles dozens of miles long headed for Kyiv.  Given their willingness to shell civilian buildings in another city, things could get worse for civilians if Russia surrounds Kyiv.  So this could get worse... but I don't know if Europe will relent to US suggestions of tougher sanctions - it should really be Europe's choice, since sanctioning oil hurts them much more than the US.

But does the EU care if the US sanctions Russian oil? Does the EU even need Russian oil (I understand that they really want natural gas)?

You're right, gas pipelines are probably more significant than oil imports.  For Europe, Russia is #1 for both.  I think oil might be easier to buy from elsewhere?
https://www.bbc.com/news/58888451

If we're both right, Russia earns 2x more from crude oil than gas (and up to 3x if you include petroleum products).  Sanctioning oil but not gas might do the most damage to Russia while being easiest to obtain elsewhere... but both Europe & the US have high inflation, and this would make it worse.  A bit of a balancing act.
https://www.reuters.com/markets/europe/russias-oil-gas-revenue-windfall-2022-01-21/

[PDXTabs]

If we're both right, Russia earns 2x more from crude oil than gas (and up to 3x if you include petroleum products).  Sanctioning oil but not gas might do the most damage to Russia while being easiest to obtain elsewhere... but both Europe & the US have high inflation, and this would make it worse.  A bit of a balancing act.
https://www.reuters.com/markets/europe/russias-oil-gas-revenue-windfall-2022-01-21/

Indeed, but it strikes me as insanity to fund the Ukrainian military (to the tune of billions of dollars) while funding the Russian military with oil revenue.

[ChpBstrd]

The Russian military has a line of vehicles dozens of miles long headed for Kyiv.  Given their willingness to shell civilian buildings in another city, things could get worse for civilians if Russia surrounds Kyiv.  So this could get worse... but I don't know if Europe will relent to US suggestions of tougher sanctions - it should really be Europe's choice, since sanctioning oil hurts them much more than the US.

I think markets are still wrestling with Ukraine & Russia's importance to world markets, and the impact sanctions will have.  But I assume existing news has been priced in.  If there's no more bad news, that could mean no more price drops.  But given the volatility of markets, that's very difficult to say... maybe 1 in 4 chance?  And probably a greater chance for more bad news, and some chance markets go sideways while digesting what has happened so far.

I think it's important to distinguish that the war could get much worse from here, while the financial impacts to invest-able Western companies stay the same or improve.

As of now, the various sanctions and supply interruptions are just about as bad as they are likely to get. The stock market could rise even while genocide and total war occur in Ukraine. Only the involvement of other countries in the fighting or the introduction of nuclear weapons would significantly affect risk premiums now.

It's a similar scenario as when COVID caused investors to write off most earnings in 2020. Once that was done, investors realized it's not likely to get worse and could get a lot better. A million+ Americans were destined to die within the next couple of years, but the market took off anyway. Bad world conditions do not equal poor stock performance.

I still have my eye on the Fed rather than Putin. The scale and timing of interest rate hikes will determine whether we are entering a bear market or going through yet another news-based correction like we've been seeing for the past decade. I'm concerned they are about 6-9 months behind the inflation curve, are facing an oil price explosion, and have committed to a sort of gradualism that will force them to take more drastic action 9-12 months from now. If we land at 2.5%, it might be smooth sailing. If we're on the road to 5%, it's unlikely the S&P will be able to maintain a PE ratio over 20.

[habanero]

Russian shares trade in London as well - the Moscow stock exchange has not been open this week at all. Russias largest bank Spbeerbank is down 99.9% the last 2 weeks. Other major companies are down 85-95% last time I looked. Its the mother of all fire sales, albeit in a fairly small market. And I guess the London market for russian equities is very illiquid as well so prices should be taken with a grain of salt.

Russian equities are not really part of a lot of global index funds as those tend to track a developed market index, but Russian equities have a weight of roughly 3% in the MSCI Emerging Markets Index (where China, South Korea and Taiwan make up roughly half the index btw). So a fund covering "all" of global markets will have around 0.2-0.3% of its assets invested in Russian equities.

Some European banks have quite a lot of exposure to Russia and those have been hammered pretty hard. The hardest hit is probably Austria's Raiffeisen bank which is down over 50% over the last few days.

[Vashy]

Sberbank has announced it will "leave" the European market. I wonder if Russia plans to re-nationalise those big commodity companies (that would concentrate more power in dictator Vlad's hands).

[Juan Ponce de León]

This is why 'emerging market' indexes should never be taken seriously.  These countries are full of corruption and you never know what black swan events their politics may unleash.

[PDXTabs]

This is why 'emerging market' indexes should never be taken seriously.  These countries are full of corruption and you never know what black swan events their politics may unleash.

To you swear off the MSCI Emerging Markets entirely? I'd hate to miss out on TSMC and Samsung.

Also, this is where I usually plug FRDM which is "freedom weighted" and has excluded Russia and China (and others) from their fund.

[PDXTabs]

This just in: WSJ: MSCI to Remove Russian Stocks From Emerging Market Indexes

[Juan Ponce de León]

This is why 'emerging market' indexes should never be taken seriously.  These countries are full of corruption and you never know what black swan events their politics may unleash.

To you swear off the MSCI Emerging Markets entirely? I'd hate to miss out on TSMC and Samsung.

Also, this is where I usually plug FRDM which is "freedom weighted" and has excluded Russia and China (and others) from their fund.

South Korea probably shouldn't even fall under emerging markets, it's a quirk more than anything.  It's a modern developed nation.

[Blender Bender]

What happens now is not only about west vs putin. But even more, now, is about west vs China.
Xi has been interested to see what would happen if Putin challenges the west. And it really starting looking bad for Xi.

If Xi attempts to take over Taiwan, the west will be united too. Not only governments restrictions, but the bigger and smaller US corporations would be part of it too. My guess that the response would be even stronger since Taiwan is way bigger economic player.

I any way, it is not easy for China to take Taiwan. The topology of the island is very tricking for attackers. On one side cliffs, on other bogs.

 

[PDXTabs]

What happens now is not only about west vs putin. But even more, now, is about west vs China.
Xi has been interested to see what would happen if Putin challenges the west. And it really starting looking bad for Xi.

If Xi attempts to take over Taiwan, the west will be united too. Not only governments restrictions, but the bigger and smaller US corporations would be part of it too. My guess that the response would be even stronger since Taiwan is way bigger economic player.

I any way, it is not easy for China to take Taiwan. The topology of the island is very tricking for attackers. On one side cliffs, on other bogs.

Unlike Ukraine, I believe that the US government would decide that TSMC was of strategic importance to the country and do their best to blow every landing craft out of the water with our naval assets.

[Affable Bear]

China is such a large exporter to the West I dont think they could get away with throwing it all up the wall for Taiwan at the moment, especially how we have responded to Russia. At least thats my hope anyway!!

[ChpBstrd]

Authoritarian dictators do not concern themselves with what they can "afford".

"Afford" is a concept for middle-class capitalists, not warlords who need an Orwellian forever war to justify their existence.

[Blender Bender]

Authoritarian dictators do not concern themselves with what they can "afford".

"Afford" is a concept for middle-class capitalists, not warlords who need an Orwellian forever war to justify their existence.

True, but i see some differences.
Xi is paranoid about not making social unrests in his country (more applicable than to russia). AFICT his thinking is that he cannot afford this, for a good reason. He wants stability inside china; putin not so much in russia. I feel that Taiwan should be safe for some time.

[ChpBstrd]

Authoritarian dictators do not concern themselves with what they can "afford".

"Afford" is a concept for middle-class capitalists, not warlords who need an Orwellian forever war to justify their existence.

True, but i see some differences.
Xi is paranoid about not making social unrests in his country (more applicable than to russia). AFICT his thinking is that he cannot afford this, for a good reason. He wants stability inside china; putin not so much in russia. I feel that Taiwan should be safe for some time.

Prosperous democracies threaten authoritarian countries by their mere existence. Remember, people in China get to look across the straits and see their neighbors in Taiwan earning 280% of their GDP per capita.

https://countryeconomy.com/countries/compare/china/taiwan?sc=XE34

This just looks bad for the government in China, just like Hong Kong's prosperity looked bad prior to annexation. There's also the temptation to take the country in a war that will cost a fraction of that territory's productive value and tax revenue over the next several year. This may be why Iraq invaded Kuwait in '91.

[MustacheAndaHalf]

China is such a large exporter to the West I dont think they could get away with throwing it all up the wall for Taiwan at the moment, especially how we have responded to Russia. At least thats my hope anyway!!

I think China will view the impacts on Russia as a warning.  It was probably also a surprise that individual companies actually went further than government sanctions, causing further economic harm to Russia for it's invasion of Ukraine.

CNBC's expert on the US Treasury lived in Russia for many years as the bureau chief for the Wall Street Journal.  Where in the US people complain about 7% inflation and the government responds, that's not how Russia works.  Putin can ignore people's suffering with impunity.
https://www.cnbc.com/video/2019/10/15/international-monetary-fund-lowers-global-growth-outlook.html

[MustacheAndaHalf]

In trying to put into words why I think the situation in Russia is different from China, I came across the "corruption perceptions index" of 180 countries, dated 2021.
1) Denmark
1) Finland
27) United States
66) China
124) Mexico
136) Russia
180) South Sudan
https://www.transparency.org/en/cpi/2021

Numerically, the U.S. is just outside the top 1/7th, China is just outside the top 1/3rd, ... and Russia is near the bottom.  In Russia corruption is the norm, not accountability.  Compare that to China, where President Xi held an anti-corruption drive years ago.  I think that reveals what their people expect: Chinese expect more from their government than Russians, as shown by their rankings.

I think that makes it more risky for China's leadership to fall under sanctions like Russia is experiencing.  While individual dissenters and protestors are censored in both places, sometimes huge numbers of people vent their anger online over the same event.  China tends to do something in those cases, where Russia wouldn't (and people probably wouldn't bother in the first place).

On the flip side, Chinese learn in school that Taiwan is part of China.  Combine that with censorship, and I would guess most Chinese haven't questioned their schooling.  They aren't given the full picture, so they probably can't imagine that the rest of the world views the situation differently.  That could lead to mistaken assumptions, which is unfortunately also the situation in Ukraine (where Putin was told Russia's military would be welcomed).

[Blender Bender]

Authoritarian dictators do not concern themselves with what they can "afford".

"Afford" is a concept for middle-class capitalists, not warlords who need an Orwellian forever war to justify their existence.

True, but i see some differences.
Xi is paranoid about not making social unrests in his country (more applicable than to russia). AFICT his thinking is that he cannot afford this, for a good reason. He wants stability inside china; putin not so much in russia. I feel that Taiwan should be safe for some time.

Prosperous democracies threaten authoritarian countries by their mere existence. Remember, people in China get to look across the straits and see their neighbors in Taiwan earning 280% of their GDP per capita.

https://countryeconomy.com/countries/compare/china/taiwan?sc=XE34

This just looks bad for the government in China, just like Hong Kong's prosperity looked bad prior to annexation. There's also the temptation to take the country in a war that will cost a fraction of that territory's productive value and tax revenue over the next several year. This may be why Iraq invaded Kuwait in '91.

I noted the differences not in reasons to invade (both have strong in their minds, to remove the positive democracies examples).

Just the difference is in the willingness to accept the costs.

[PDXTabs]

WSJ: Congress Introduces Bill to Ban Russian Crude, Seeking to Squeeze Putin Revenue Source

[Radagast]

This is what is meant for the Russian markets

https://twitter.com/i/status/1499341576518217730

[ChpBstrd]

Authoritarian dictators do not concern themselves with what they can "afford".

"Afford" is a concept for middle-class capitalists, not warlords who need an Orwellian forever war to justify their existence.

True, but i see some differences.
Xi is paranoid about not making social unrests in his country (more applicable than to russia). AFICT his thinking is that he cannot afford this, for a good reason. He wants stability inside china; putin not so much in russia. I feel that Taiwan should be safe for some time.

Prosperous democracies threaten authoritarian countries by their mere existence. Remember, people in China get to look across the straits and see their neighbors in Taiwan earning 280% of their GDP per capita.

https://countryeconomy.com/countries/compare/china/taiwan?sc=XE34

This just looks bad for the government in China, just like Hong Kong's prosperity looked bad prior to annexation. There's also the temptation to take the country in a war that will cost a fraction of that territory's productive value and tax revenue over the next several year. This may be why Iraq invaded Kuwait in '91.

I noted the differences not in reasons to invade (both have strong in their minds, to remove the positive democracies examples).

Just the difference is in the willingness to accept the costs.

Keep in mind we are talking about China, a nation that paid an outrageously high cost to fight COVID by shutting down entire cities with multiple millions of people and forcing everyone to stay indoors. They spent or lost trillions in economic activity to avoid an outcome even remotely as bad as the US's.

From the perspective of a senior party leader, "costs" do not actually exist. You just order people to do different types of work, and power is the only real currency. The decision to invade or not invade Taiwan will be made on the basis of whether it is expected to increase or decrease power.

[Blender Bender]

Authoritarian dictators do not concern themselves with what they can "afford".

"Afford" is a concept for middle-class capitalists, not warlords who need an Orwellian forever war to justify their existence.

True, but i see some differences.
Xi is paranoid about not making social unrests in his country (more applicable than to russia). AFICT his thinking is that he cannot afford this, for a good reason. He wants stability inside china; putin not so much in russia. I feel that Taiwan should be safe for some time.

Prosperous democracies threaten authoritarian countries by their mere existence. Remember, people in China get to look across the straits and see their neighbors in Taiwan earning 280% of their GDP per capita.

https://countryeconomy.com/countries/compare/china/taiwan?sc=XE34

This just looks bad for the government in China, just like Hong Kong's prosperity looked bad prior to annexation. There's also the temptation to take the country in a war that will cost a fraction of that territory's productive value and tax revenue over the next several year. This may be why Iraq invaded Kuwait in '91.

I noted the differences not in reasons to invade (both have strong in their minds, to remove the positive democracies examples).

Just the difference is in the willingness to accept the costs.

Keep in mind we are talking about China, a nation that paid an outrageously high cost to fight COVID by shutting down entire cities with multiple millions of people and forcing everyone to stay indoors. They spent or lost trillions in economic activity to avoid an outcome even remotely as bad as the US's.

From the perspective of a senior party leader, "costs" do not actually exist. You just order people to do different types of work, and power is the only real currency. The decision to invade or not invade Taiwan will be made on the basis of whether it is expected to increase or decrease power.

Right. I meant costs not necessary $ but social costs, unrests, future china/party standings, threatening the party grab. That's the very likely costs as it might look like in the short term for Xi.

[Scandium]

In trying to put into words why I think the situation in Russia is different from China, I came across the "corruption perceptions index" of 180 countries, dated 2021.
1) Denmark
1) Finland
27) United States
66) China
124) Mexico
136) Russia
180) South Sudan
https://www.transparency.org/en/cpi/2021

Numerically, the U.S. is just outside the top 1/7th, China is just outside the top 1/3rd, ... and Russia is near the bottom.  In Russia corruption is the norm, not accountability.  Compare that to China, where President Xi held an anti-corruption drive years ago.  I think that reveals what their people expect: Chinese expect more from their government than Russians, as shown by their rankings.

I think that makes it more risky for China's leadership to fall under sanctions like Russia is experiencing.  While individual dissenters and protestors are censored in both places, sometimes huge numbers of people vent their anger online over the same event.  China tends to do something in those cases, where Russia wouldn't (and people probably wouldn't bother in the first place).

On the flip side, Chinese learn in school that Taiwan is part of China.  Combine that with censorship, and I would guess most Chinese haven't questioned their schooling.  They aren't given the full picture, so they probably can't imagine that the rest of the world views the situation differently.  That could lead to mistaken assumptions, which is unfortunately also the situation in Ukraine (where Putin was told Russia's military would be welcomed).

The US all the way up at 27th shocking, must be bad methodology. Every single senator can be bought for a $100k "campaign donation"?! Whether or not you can bribe a cop is meaningless when the whole government is for sale!

[ChpBstrd]

In trying to put into words why I think the situation in Russia is different from China, I came across the "corruption perceptions index" of 180 countries, dated 2021.
1) Denmark
1) Finland
27) United States
66) China
124) Mexico
136) Russia
180) South Sudan
https://www.transparency.org/en/cpi/2021

Numerically, the U.S. is just outside the top 1/7th, China is just outside the top 1/3rd, ... and Russia is near the bottom.  In Russia corruption is the norm, not accountability.  Compare that to China, where President Xi held an anti-corruption drive years ago.  I think that reveals what their people expect: Chinese expect more from their government than Russians, as shown by their rankings.

I think that makes it more risky for China's leadership to fall under sanctions like Russia is experiencing.  While individual dissenters and protestors are censored in both places, sometimes huge numbers of people vent their anger online over the same event.  China tends to do something in those cases, where Russia wouldn't (and people probably wouldn't bother in the first place).

On the flip side, Chinese learn in school that Taiwan is part of China.  Combine that with censorship, and I would guess most Chinese haven't questioned their schooling.  They aren't given the full picture, so they probably can't imagine that the rest of the world views the situation differently.  That could lead to mistaken assumptions, which is unfortunately also the situation in Ukraine (where Putin was told Russia's military would be welcomed).

The US all the way up at 27th shocking, must be bad methodology. Every single senator can be bought for a $100k "campaign donation"?! Whether or not you can bribe a cop is meaningless when the whole government is for sale!

You have to admit though, it is inspiring that 26 other countries were able to improve their corruption rankings to be better than the U.S. Surely we can do better.

Also, cops in the U.S. are less likely to be corrupt in terms of bribes than they are in terms of covering for each other when they kill people, or being thoroughly infiltrated by members of white supremacist organizations.

[volleyballer]

Hello everyone, I have been following this thread and the off topic Ukraine thread for a while and appreciate the discussion.

Couple thoughts to add...

1) It's almost like Russia is begging for the west to get involved with boots on ground, between the hits on civilians and seemingly slow playing their military hand in Ukraine.

2) What is China's role in all this? Are they behind the scenes waiting for the west to get sucked in, so they can consolidate power in the Pacific (in particular, Taiwan)? I don't have any evidence to support this claim, just a gut feeling.


Sent from my Pixel 4a (5G) using Tapatalk

[DaTrill]

Shutting off the financial system and seizing private property for the ills of government actions seems ironic coming from the US.  We have just handed the playbook to the world for how to destroy our country if the US government ever, I don't know, bombs an innocent country for the ills of a few individuals or just creates a reason to spur the economy (Iraq, Afghanistan, Vietnam, list too long TLDR). 

Unless Joe and the comma have repealed the law of unintended consequences, this is going to be ugly for everyone and everyone in the US has MUCH more to lose than anyone in Russia.  I do not like Russia or Putin, they are adversaries for the Western lifestyle, but backing corrupt Ukraine is something that should be debated and not goose-stepped into without thought.

I usually watch DW for news regarding anything in Europe.  The best move for the US is to let Russia fail at propping up a failed state.  Nation building is not something Russia or US do well at all.  If I had to guess, getting involved in Ukraine is a bait that the US-Biden are too stupid to avoid bungling.  Where were all the calls for war crimes committed by Bush/Chainey/Powell and Biden bombing kids in Afghanistan?       
     
https://www.youtube.com/watch?v=qD6jX1QlB_E&t=3s
https://www.youtube.com/watch?v=g75TCVNCLPk       

[SwordGuy]

If that happens, a right-wing president DeSantis or Cotton or Taylor-Greene would likely be more friendly to Russian interests than NATO's.

I'm curious why you think this? Most Republicans have been calling out the threat from Russia for years. Back in the presidential debate in 2012 Romney was mocked when he said Russia was our largest geopolitical threat. Trump focused more on China - which frankly is a much larger threat on every metric (military, economic, cultural, information, etc.) except perhaps number of nukes - and they've still got more than enough to kill most Americans.

Is this based on the "Russian collusion" charge that boiled down to the Clinton campaign generating a bunch of made-up BS (the Steele Dosier and everything associated with it) and using a compliant media/government to spread those lies for years on end?


Russia ranks 11th in GDP, between South Korea and Brazil - about $1.4 Trillion compared to the US at $20 Trillion

Russia ranks 9th in population, between Bangladesh and Mexico - 146 million (and falling) compared to the US at 333 million (and growing)

The only thing they have is an outsized military relative to their size - and a whole bunch of nuclear weapons to always hold as an implicit threat.

Well, let's see.  Trump is saying Putin is a genius on this matter.   A bunch of other Republicans were in favor of the Russian point of view, as were a bunch of other alt-right talking heads in the media.  So much so that Cheney called out the "Putin wing of the Republican Party."   Some of these folks are still backing Putin, some are backing down from that (in public) because they realize it appears very, very unpopular bullshit.   Some are even calling for Putin to be far more brutal towards the Ukrainians.  Bolton has now revealed that Trump wanted to pull the US out of NATO in his 2nd term.   Jeez, that's pretty Putin friendly, I would say.

As for the "made up" Russian collusion claim, there were a bunch of people in Trump's orbit who were meeting with a number of Russians with spy connections and lying about it.   That's established fact.    Just because we couldn't prove in a court of law that they were up to no good doesn't mean they weren't.   They were clearly up to stuff they thought important enough to lie about.

The staunch anti-communist positions that the Republican party I grew up with could be counted on to have are not really there anymore.   A big chunk of the Republican party has retreated to the isolationist postures the Republican party had a generation earlier and the white supremacist/ neo-nazi components in the GOP are very much pro-Putin.  They seem to think Russia is a white nationalist's paradise and they love a strong dictator in concert with that.   I've lost count of the number of rabid Trumpites who have personally told me they would vote for a communist before they would vote for a democrat.   Given that over 50,000 Republicans in just one state legislative district alone recently voted for a known, actual, no-kidding Nazi, I don't think my anecdotal evidence is an aberration.   (And that's not just me calling that candidate a Nazi, that's the Illinois GOP calling the Republican candidate a Nazi.   To their credit, the IL GOP asked people not to vote for the Nazi, but as the candidate so aptly stated, they know what I stand for and they like it.)

[mistymoney]

This is what is meant for the Russian markets

https://twitter.com/i/status/1499341576518217730

maybe post this on the "when will russian stocks be cheap enough to buy" thread....

[Affable Bear]

Well, let's see.  Trump is saying Putin is a genius on this matter.   A bunch of other Republicans were in favor of the Russian point of view, as were a bunch of other alt-right talking heads in the media.  So much so that Cheney called out the "Putin wing of the Republican Party."   Some of these folks are still backing Putin, some are backing down from that (in public) because they realize it appears very, very unpopular bullshit.   Some are even calling for Putin to be far more brutal towards the Ukrainians.  Bolton has now revealed that Trump wanted to pull the US out of NATO in his 2nd term.   Jeez, that's pretty Putin friendly, I would say.

As for the "made up" Russian collusion claim, there were a bunch of people in Trump's orbit who were meeting with a number of Russians with spy connections and lying about it.   That's established fact.    Just because we couldn't prove in a court of law that they were up to no good doesn't mean they weren't.   They were clearly up to stuff they thought important enough to lie about.

The staunch anti-communist positions that the Republican party I grew up with could be counted on to have are not really there anymore.   A big chunk of the Republican party has retreated to the isolationist postures the Republican party had a generation earlier and the white supremacist/ neo-nazi components in the GOP are very much pro-Putin.  They seem to think Russia is a white nationalist's paradise and they love a strong dictator in concert with that.   I've lost count of the number of rabid Trumpites who have personally told me they would vote for a communist before they would vote for a democrat.   Given that over 50,000 Republicans in just one state legislative district alone recently voted for a known, actual, no-kidding Nazi, I don't think my anecdotal evidence is an aberration.   (And that's not just me calling that candidate a Nazi, that's the Illinois GOP calling the Republican candidate a Nazi.   To their credit, the IL GOP asked people not to vote for the Nazi, but as the candidate so aptly stated, they know what I stand for and they like it.)

You can't underestimate the massive amount of brainwashing and propaganda attacks being made by Russia through social media, if you can convince enough people to want something policiticians pick up on that (Trump) and run with it under the pretense 'the people want' when in actual fact it is 'Russia wants'. I am sure I watched something a while ago about the rise of Trump that the Russians were creating 1000s of fake profiles and commenting and causing arguments and spreading misinfomration, this is probably just the tip of the iceberg! Who knows what else they have been doing to influence not just the US but other countries across the world.. 

It's also easy to rile up anger about Nato and Europe not pulling its weight militaristically (tbf they dont) when there are comparatively low tensions by using the argument that the US has to spend large amounts on military to compensate for Europe. In reality I think it is likely the US would spend the same regardless of what treaties they are committed too (so why be angry other than to withdraw from Nato and allow Russia in?) because at the end of the day isolationism isnt feasable in an ever increasing and connected world and its not free to shape it, especially with China and Russia pushing their spheres of influence on everything..

Europe could have been better prepared, I mean why even bother building that Nord stream pipe in the first place, surely it is better to build up nuclear/renewables and remove reliance on a foreign country (especially Russia).. I really hope this is a wake up call to the UK to speed up and increase nuclear development and become energy independant/secure, even though we only get about 6% of our gas from Russia we do import electricity from Europe and I just want the end of stupid fossil fuels and countries holding eachother hostage over them.