UKRAINE: WHERE IS RUSSIA'S ACHILLES HEEL?
A Thread
1/15
In most every global conflict - offensive or defensive, military or economic - western governments seek to game out the likely reactions of adversaries.
We assume the Russians engage, at some level, in a similar exercise.
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2/15
The "game over" for most responsible governments is, of course, global nuclear war. So all actions - military or economic - risking escalation to that point are viewed as potential steps towards the unthinkable.
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3/15
And there is always the risk of the irrational actor who ignores the principles of Mutually Assured Destruction and sets off a cataclysm.
There has been much discussion, of late, on whether Putin is such an actor.
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4/15
Now, it is reasonable to assess not just the potential for global destruction, but of economic havoc rebounding to those nations uniting against an aggressor. But geo-strategic concerns always gain primacy and the latter eventually (often too late) fall by the wayside.
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5/15
Yet grave and costly miscalculations can be, and have been, made along the way in dealing with aggression. The most important is accurately assessing the resources and capabilities of the aggressor.
We in the west saw this vividly when the Cold War came to an end.
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6/15
What we discovered was that the vaunted and boasted military, technological and strategic prowess of the Soviet Union was little more that a Potemkin Village.
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7/15
And that it is likely not that the Soviet leadership was cognizant that it was rattling non-existent sabers. But that everyone up the chain of command was lying to the leadership.
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8/15
The Russian soul is well illustrated by Putin's attempt at restoring the country to its Tsarist/Stalinist past, and in his unwillingness to suffer anything differing from his own narrative. Here is Putin dressing down his own national security advisor cnn.com/videos/world/2…
9/15
So now the west, in its levying sanctions and taking other actions to end Russia's invasion of Ukraine, must assess Putin's resources .
And there is a real risk of again attributing to Russia greater power than it actually has.
Particularly in cyber-warfare capabilities.
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10/15
Russia has been a huge cyber-disruptor over the past decade - infiltrating both political and commercial systems - often via dark networks of criminals who have the tacit approval/encouragement of the Kremlin. It is realistic for the west to fear retaliation on this front
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11/15
In gaming out these scenarios, however, it is important not to attribute to Russia's decentralized and money-driven cyber-capabilities the same resources the west possesses in its vast arsenal of cyber weapons and controls. Most of them not visible to the other side.
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12/15
Russia has intentionally cultivated an overblown fear of its cyber-disruptive capacity, in true Russian style. That is Russia's Achilles Heel.
And the reason that we should be unstinting in the application of economic and trade sanctions to shut down the Russian nation.
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13/15
Those must go beyond blocking Russian bank access to SWIFT, and extend to any bank doing business with Russia having access to SWIFT, CHIPS, the FedWire or UK CHAPS. To shut off Russia completely from global clearing systems.
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14/15
No country can trade or function without participation on global dollar clearing - over 88% of all global foreign exchange transactions involve the US$. No nation has a "fortress balance sheet" that can avoid this reality for long.
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15/15
In addition the west should turn loose - without fear of retaliation that can't be dealt with and neutralized - cyber-actions to disrupt Russia's internal infrastructure and communications.
We needn't boast about the latter part, either.
Just do it. #END
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Good #BLS#NFP Jobs Day.
Below are my pre-report observations on what to look for.
Stay tuned for quick analysis and, thereafter, the @jobqualityindex data related to today's report.
Non-farms payrolls up 199,000
Private sector up 211,000 (loss of government workers)
Unemployment rate falls to 3.9% as labor force increases by only 168,000. LFPR flat at 61.9.
Stay tuned for additional analysis, but this is miserable data.
Upward revisions for two prior months totaled 141,000. Not bad, but nowhere near enough to offset the bad news today.
Leisure and hospitality hiring DID stall in December, up only 41,000 vs. 211,000 in November. Retail jobs fell (at Christmas!) by 13,300 (perhaps seasonal adj?)
The complex dynamics of today's Employment Situation Report: 1) We are still in a "re-hiring" phase, not a jobs creation phase (the jobs have been out there for months). So the key data point will be labor force participation. If the jobs number is strong and LFP rises...>>
>>...that will likely mean the return of workers previously sitting on accumulated federal transfers needing to become re-employed, the unemployment rate remaining stable (or even rising) and wage pressures decreasing this year. 2) Probably too early for the December data...>>
>>...as the test week ended 12/17, but it will be interesting to see if leisure and hospitality were hammered yet - as it and other sectors surely will be in January - due to Omicron. 3) Finally, the adjustments from November's weak date will be interesting to see. Covid...>>
#NFP Expecting a strong number today. The headline will not be impacted by the loss of government education jobs we saw in September and I expect private sector to show far more strength with the ending of supplemented unemployment benefits now fully filtered through the data.
#NFP As a result of the above, I see the number as likely to exceed expectations of 450K to 475K, with a decent shot of well-exceeding that range. But the test week was the week ending October 17th, and activity has increased measurably after that with improving COVID data.
#NonFarmPayrolls come in at 531,000 in October as the Unemployment Rate registers 4.6%. Now let's look at the details underneath the headlines as we await the @jobqualityindex data.
1/10
THREAD: There's No "Great Resignation"
There's this idea that a post-pandemic "labor shortage," yielding wage inflation, is caused by disinterest in work.
A good example of the "paralysis of aggregates" I spoke of in this @Bloomberg podcast this week: bloomberg.com/news/articles/…
2/10
That's an easy snap judgment to arrive at when you correlate the malaise related to these 19 months of plague with the fact that, in the aggregate, millions of workers have, in fact, not yet returned to their jobs:
3/10
But if that is where you stop in your analysis you miss the underlying realities. First of all, we know where the unfilled jobs are - they are disproportionately in the low-wage/low-hours (read "low income") sectors. See the income levels below for guidance and bear with me:
Good Jobs Day everyone. Today we see if the slow pace of reduction in continuing (not initial) extended and supplemented unemployment claims is again reflected in the #BLS data for June. Estimates for job growth of ~600K private and ~700K total sound reasonable, but its dicey.
If we get a big jump in jobs, we should see a slump in wages as most of the jobs seeking worker are low-wage/low-hours jobs. And they are not likely the type to draw in people off the bench from either the unemployed OR those who have left the labor force: nytimes.com/2021/06/01/opi…
#BLS Non-farm payrolls rise by 850,000
The U-3 unemployment rate remains at 5.9%
Good Jobs Day morning! Hopefully we will see a renewed acceleration in the restoration of jobs during May. But after we dissect the data at 8:30am EDT. the remaining question will be which sectors still have not returned to prepandemic employment levels?
Answer: Mostly low income
We know that the re-employment gap is mostly in the low income sectors (below) because there are many workers receiving unemployment benefits exceeding incomes from their old jobs.
What we don't know is whether all their old jobs are really still there! nytimes.com/2021/06/01/opi…
With the above as prologue, stay tuned for the data in 5 minutes....