Few thoughts on the currently military/political situation in the Russia-Ukraine war.

Ever since Ukraine army broke through defenses In Balaklia in Kharkiv oblast a month ago, Russian army has been in retreat 1/ The next major town in the path of Ukrainian army was Krupyansk which Russian forces abandoned after being surrounded in a semi-circle and being allowed only a narrow path to escape.

Based on reporting relying on local sources, Putin is firstly commanding forces on the ground 2/

A prof of Intnl Security doesn’t seem to understand that allowing a use of nuclear weapons in a war of aggression against non-nuke state would upend global security architecture and destroy NPT, triggering global nuclear arms race with disastrous consequences /1

https://twitter.com/patporter76/status/1576835631639982080

For starters, states like South Korea, Taiwan and Japan that are technologically advanced with experience in nuclear energy and live next to aggressive nuclear China and NKorea , can probably develop nukes within 2yrs 2/

Today is exactly 7 months since Russia launched its disastrous war on Ukraine. it became apparent that this war was lost in March and rather obvious after Ukraine’s counteroffensive in early September.

Putin’s abrupt “partial” mobilization decree is an admission of defeat

A 🧵 For 7 months Putin has referred to his war as “special military operation,” something he planned to successfully wrap up within a week ( Russia initially suspended its civil aviation in southwest of the country through March 2nd tourism.interfax.ru/ru/news/articl… )
2/

Ukrainian military journalist Yuri Butusov reported earlier today that all Ukrainian reserves have been mobilized now.. that’s 200,000 men in addition to 250,000 in regular army. Unlike territorial defense forces protecting the cities these are experienced soldiers that could 1/ take part in the next phase of the war in the Donetsk, Luhansk, Kharkiv and Kherson regions where Russians have established footholds and are trying to regroup the remainders of their northern forces. There have been reports that Russians are also in the process of mobilizing 2/

It’s hard to believe how effective Kremlin propaganda by spreading the “Nazis in Ukraine” canard and using Azov as their favorite boogie man. This has been mindlessly regurgitated by the media and recently amplified by MAGA Twitter accounts.. 🧵 Back in 2014 when Russian military took over and illegally Crimea and sent its special forces and GRU agents to instigate a war in Donbas, Ukraine had a standing army of around 120,000 and only 5,000 combat ready troops, and wasn’t prepared for a full-scale conflict 2/

I’ve read the first 5 letters and though they seemed plausible to some extent but likely fake, this paragraph alone in the new letter, tells me that these letters are 100% fake 1/

https://twitter.com/igorsushko/status/1503668387959885826

For an alleged Russian intelligence officer to frame that the Iranian missile was some kind of a start of a war, tells me that this person has little awareness of how Iran has operated in the past and therefore is not an intelligence officer he claims to be 2/

Make no mistake, no matter how this war ends this is a more seminal moment for the entire world than 9/11… there is pre-9/11 world and post-9/11 and there will be pre-2/24/22 world and post-.. the European and world security arrangements will be very different 1/ For those who grew up in the post-ColdWar period of tranquility, prosperity and progress in the western world, the concerns will shift from “what’s the resolution on the next iPhone” to wondering “can the war in some shape or form come to my doorstep” 2/

Since I am getting some “pushback” on my 2 cents from a few days ago, let me follow up with a 3rd cent.

My calculus didnt include Putin going mad and was based on way he operated over the past 23yrs: tactical, calculating and engaging in low cost action with assured victory 1/ The main point I wanted to reiterate that still stands from my thoughts a few days ago is that this is still a strategic defeat for Putin, only now with far greater cost in Ukrainian lives, Russian lives and Russian economy 2/

Putin’s kabuki theater with publicizing the meeting of his Security Council on Monday is very reminiscent of Stalin’s methods.

Whenever Stalin was given a compiled list of “enemies of the people” subject to execution, he signed it and passed it 1/ around the Politburo table for everyone else to sign. As such, all of his circle was held equally responsible/guilty of his crimes. The intent behind publicizing Monday’s meeting was to tell his entourage that they are all on the hook now for an act he knew was illegal 2/

I’m still seeing a lot of talk that a full-scale invasion of Ukraine by Putin is in the cards,especially that his military hardware keeps getting closer to the border.

While the risk of a wider regional conflict in E.Ukraine is high, full-scale invasion unlikely. Here is why 1/ Let me start with stating that I am no military historian but have a decent command of modern history and have gone through some of the modern large scale military conflicts for reference to see whether the forces Russia has amassed are enough for a successful invasion 2/

Sending additional NATO troops to the Baltics is a strong move, but IMHO I think the way this poker game needs to be played is to also send a large contingent into Poland on the border with Belarus.. given that Lukashenko doesn’t have legitimacy at home after 1/ retaining power despite losing the 2020 elections, he would be legitimately fearful that the west would just topple him and bring back Svetlana Tikhanovskaya who won the elections.. the people of Belarus would only applaud this outcome 2/

If you listen to Putin’s yesterday speech where he rants on how the dissolution of the USSR was practically illegal and how Lenin endowing the republics with some degree of sovereignty in 1922 was almost criminal, before proceeding to lament that Ukraine’a sovereignty is 1/ not justified.. you have to wonder how other post-Soviet states are listening to this.. since the implication here is that none of them should have been allowed out of the Russian/Soviet empire ( or as people mocked during late USSR - a prison of nations ) nor 2/

My 2 cents on Putin’s decision today:

This is a strategic defeat for Putin and a full-scale war is even less likely after today then before.

Let me explain in this thread. The primary goal of Putin has been to subjugate Ukraine and especially its foreign and defense policy 1/ To Russian interests and priorities..

In essence the goal was to make Ukraine into a vassal state, a la Belarus where Russia retains full political control and leverage and which is currently in the process of soft annexation 2/

The sad thing about Putin’s craving for a “zone of influence,” is that Russia doesn’t offer any compelling economic, political or cultural alternatives that would attract its neighbors in a positive and interested way 1/ People all over the world don’t drink Coca-Cola, watch Hollywood movies, use iPhones or prefer a political system that champions their individual rights not because they are forced to make these choices under the barrel of American military 2/

I see a lot of ridiculing of the warnings of the imminent invasion of Ukraine by Russia.. and i think most people don’t actually understand what’s going on.. the messaging has been a bit clumsy but is effective and is working as intended 1/ The truth of the matter is that Russia’s war on Ukraine has started in 2014 and its most recent iteration has been ongoing for a few months now.. shots hasn’t been fired and troops haven’t crossed the border because it’s a hybrid war 2/

My base case scenario at this point is that the market will end up rallying harder and higher by the ends of the year than it would have without he virus.. 1/ What’s most likely to happen is that the market will de risk, the fed will cut close to 0 and restart QE, global fiscal stimulus would get unleashed.. meanwhile, the virus crisis will pass by mid May with the economy largely intact 2/

What I think has been going on in the markets:
1. Hedge Funds got hurt in October by bad tech earnings and started to de-lever net and gross exposure
2. Some of the smartest multi-strat players like Millennium and Citadel had their worst months in a while in November

1/ 3. Bullish positions in #oil came under pressure after expectations of Iranian supply leaving the market were disappointed
4. Under pressure from Kashoggi affair, Saudis had little autonomy to support the oil market
5. A number of large commodity funds went into tailspin
2/