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Ukrainian-Russian situation: impact to the market

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It's not from april 1st, but I just noticed too that it's from 2010 :D So even worse :D It's been featuring today in the newsfeeds that's why I noticed it and read the content to some extent before posting. Then read some more and got confused when they sent the letter to president ... Medvedev... So I rechecked the date and ... well sorry guys, but it's not such a bad idea though ;)
 
mario i was talking about the "russia removes some troops" article (which is dated april 1st). i did notice your article was from 2010 though too, but didn't mention it (to me, the news that a russian town wants to go to estonia is interesting, but not nearly as interesting as the russians removing troops).

surfside
 
It looks like the Ukraine troubles are with no end in sight. The inner tearing apart along ethnic lines will likely continue. I would be surprised if there is any outside involvement apart from sanctions and diplomatic language.

Reuters calls this war 'Gas war' as the gas supply to some EU countries runs through Ukraine. Russia may choose to turn off the gas supply to punish Ukraine with unavoidable consequence of stopping supply to EU. I expect a lot of turmoil in the region for many years to come, as both sides in the conflict fight it out to get their way.

I try not to pass judgments on any side in the conflict in which both sides have high stakes. My only stake is my concern for both parties well-being. I just wish for both parties to get what they want without killing each other. Not likely.
Latest news: First casualties
 
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Well it's looking like the situation in East-Ukraine is developing according to the pre-arranged playbook. Here's a google translate version of a meeting that prepared for the currently ongoing situation of people in various places storming police stations and administrative buildings. The surreal part is how well they match the actual events.

Google Translate

Of course there are always more than one side, but this does match the usual playbook of Russia who has absolutely no problem lying through their teeth in international meetings and media. According to this propaganda the phase three will happen in ca a week from the start. That's where the "freedom bringers" will come in to assist the brethren who are oppressed.
 
Hm, the situation seems to get worse day by day, but TSLA and the DAX are rising again... The timing of this report of a missile test worries me: ITAR-TASS: Russia - Russias Space defence force tests launch Yars new ballistic missile Hasn´t it hit the media yet or why are the markets so positive at the moment?

I think the crap ongoing in the region is somewhat priced in already. As long as it's remaining at the level it is it probably will not have major impacts on the markets. Serious escalation on the other hand could. And to be fair I don't see Russia just backing down, they have no true incentive to do so, they are playing through the playbook of local people rising up and asking for protection so they play the role of the good guys even though it's obvious it's false. But they are gambling on the fact that noone wants an armed conflict especially with all the FUD ongoing and it being hard to separate fact from fiction.
 
I hope the situation in Ukraine doesn't take a turn for the worse. The Russians are doing exactly what I thought they would do: they are pushing the boundaries (quite literally) to find the point where the West is willing to push back. Unfortunately, I don't get the sense that the U.S. and the E.U. are prepared to do what it takes to establish a new equilibrium, which makes me think that Russia invading Eastern Ukraine is not as unlikely as everyone hopes.

This Washington Post editorial and this article paint a pretty concerning picture. It all depends on how determined the Obama administration and its European allies are to respond.
 
Well the good news for me is that US is sending troops for "exercises" next week to Estonia who will stay as I understood up to the end of this year. That should dispel some initiatives from Russia towards Estonia at least as we've been marked in many cases as the next country after Ukraine due to the large amount of Russians at our eastern border where the density is higher for russians than estonians even. However from what I know the Russians would never really want to join Russia as their life in Estonia is order of magnitude better than in Russia, but FUD and dissent can be organized without local consent easily...
 
The Ukraine abolished minority language law, thus denying Russian speaking minority the use of Russian as a regional language. That may be part of the reason for the unrest. The economic situation in Russia might be better than in the Ukraine, so the separatist movement is not surprising. For as long as country provides good life for its citizens including minorities and does not oppress anyone, no one will want to leave.
 
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The Ukraine abolished minority language law, thus denying Russian speaking minority the use of Russian as a regional language. That may be part of the reason for the unrest. The economic situation in Russia might be better than in the Ukraine, so the separatist movement is not surprising. For as long as country provides good life for its citizens including minorities and does not oppress anyone, no one will want to leave.

The main reason for the separatist movement in Ukraine is agitation by the Russian FSB at the direction of Vladimir Putin.

The only official language in Russia is Russian. The language law in Quebec is far more repressive than in Ukraine.

It took 10 years of brutal war for Russians to suppress a rebellion by the tiny Chechen minority.

The relatively prosperous situation in Russia is based on raw materials exports. Oil, natural gas, metals and timber. Such a country will, at best, be a middle income country dependent on the boom bust cycles of global commodity prices.

Pensioners and members of the military have been wooed by state checks that are 4X greater in Russia than Ukraine based on CURRENT commodity prices.

The Ukrainian economic situation is a mess. It was traditionally the bread basket of the Soviet Union and before that the Russian Empire. Now they compete with EU and American subsidized farmers.

The Political situation is a mess because they are always dealing with Eastern Provinces and Crimea threatening to leave. This is very destabilizing and scares off international investors.
 
Good analysis, Familial. As tensions ratchet up and escalate, this has the potential to destabilize global markets further, and I hope eventually peace prevails on all sides.

For those who might want a break from the heavy rhetoric in the news:

Is there a series of irreverent political cartoons summing up the crisis? - Everything you need to know about the Ukraine crisis - Vox

The cartoons are indeed funny, but even more interesting is the detailed analysis about the Ukraine crisis on that site. The questions addressed are the important ones, and the answers are very nuanced and in-depth. Very cool.
 
(-- continued from the Short Term thread.)

Actually, Crimea was part of Russia until 1954 when for administrative purposes the Soviet government transferred it to Ukraine. Since this was all within the Soviet Union, there was little concern, especially in the west. Then when the Soviet Union broke up in 1991, there was Crimea still attached to Ukraine. Communism in the region was essentially abolished. In Ukraine there was concern regarding federal allegiance that was unnoticed in the west until recently. The Crimean people have voted to have Russia supply federal services. Perhaps a vote should be taken elsewhere in Ukraine. There was no "land grab" as the yellow press suggests. Farmers kept their land. People still own their homes. Businesses retained their property. Pensions were increased.
Yes, the Crimean people voted, but what also happened was that Russian troops invaded. The fact remains that Crimea's rejoining of Russia, as historically logical as it is, should not have happened through military invasion.

The real issue now is what will happen with the Eastern part of Ukraine. You seem to imply that further invasion by the Russian military is acceptable as a way to provide better federal services to that region, too, to use your favourite phrase. Ask the Baltic countries how they feel about that. I'd argue that as NATO members in good standing, their take on it is quite relevant to the U.S.

(As a side note, your reference to yellow journalism in this context is unwarranted. NATO recently making itself more visible in the area is certainly not driven by the catchy headlines.)

General George Washington warned against foreign entanglements when he was leaving the presidency. General Dwight Eisenhower dissented from US involvement in the Suez Crisis, and warned against the military-industrial complex when he was leaving the presidency. People in the rest of the world don't like the US acting as the bully who sets all the rules. I certainly didn't like it when I was drafted and sent to intervene in a civil war in Vietnam. The US military is larger than those in the rest of the world combined. It does not need military allies to protect our shores. Military allies are albatrosses around our neck. We don't need to stick our noses into everything. We just need friendly trading partners and the goodwill of the citizens of all countries.

I recognize that the tension between the isolationist and internationalist schools of thought has a long history in the U.S., and I agree that the U.S. should do what is best for its own interests. I believe that turning a blind eye to what is happening in Europe would be a move against those very interests.
 
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Actually, Crimea was part of Russia until 1954 when for administrative purposes the Soviet government transferred it to Ukraine. Since this was all within the Soviet Union, there was little concern, especially in the west. Then when the Soviet Union broke up in 1991, there was Crimea still attached to Ukraine. Communism in the region was essentially abolished. In Ukraine there was concern regarding federal allegiance that was unnoticed in the west until recently. The Crimean people have voted to have Russia supply federal services. Perhaps a vote should be taken elsewhere in Ukraine. There was no "land grab" as the yellow press suggests. Farmers kept their land. People still own their homes. Businesses retained their property. Pensions were increased.

General George Washington warned against foreign entanglements when he was leaving the presidency. General Dwight Eisenhower dissented from US involvement in the Suez Crisis, and warned against the military-industrial complex when he was leaving the presidency. People in the rest of the world don't like the US acting as the bully who sets all the rules. I certainly didn't like it when I was drafted and sent to intervene in a civil war in Vietnam. The US military is larger than those in the rest of the world combined. It does not need military allies to protect our shores. Military allies are albatrosses around our neck. We don't need to stick our noses into everything. We just need friendly trading partners and the goodwill of the citizens of all countries.

Curt, first of all thank you for your service. Also, I respect your thoughts highly and it is certainly your prerogative to promote a laissez-faire US foreign policy. But, I disagree that a US policy of doing nothing in this case is in the best interests of our country. If Putin hypothetically annexed more than the Ukraine and was not stopped short by diplomatic or other means here, it might escalate to a place that noone wants to be, and I think this is the tempo and stance US leadership holds right now.

To be blunt, Russia is one of two nations on the planet (the other being China) with strategic nuclear weapons pointed at your and my head. Unlike the various terrorist antagonists we have faced in recent decades, this nation could actually pose an existential threat to the USA if it so chose. Vladimir Putin directly controls some 1,800 active and operational nuclear warheads.

Washington is a company town, and having worked in the Federal government myself, I suspect that the intelligence and defense communities are privately on a state of alert not seen for decades over this crisis, because the extent of Putin's intentions remains unknown. Whether you believe your government should or should not intervene to challenge the first forcible shifting of European borders in 60 years, Washington has re-activated its cold war playbook, called in some old cold war experts, and is most certainly not going to allow Putin to go unchallenged on the continent.

So, given the stance of the US and Russian governments right now, I believe this conflict means further yet periodic instability, indecision, and volatility in the markets, to which TSLA will likely remain vulnerable for the immediate future. (See -- this is about short-term TSLA price movements! :smile: )
 
I really have trouble seeing this issue the way most posters here see it. To me Ukraine problem seems to be internal Ukraine problem most of all. Many other countries have similar problems. Large segment of the population wants to separate as they distrust their government and expect to have a better life outside of it's jurisdiction. It might lead to better outcome if unloved host country focuses on resolving internal issues before calling for someone more powerful to do the job for them and ensure their crumbling integrity.

Unfortunately all focus in this issue is on Putin and what he might and might not do, and that might be distracting from the root cause of the issue, why all these people distrust Ukrainian government. It seems to me that Putin's role in this issue has been overblown.

Switzerland is full of Germans, French and Italians but none of them wants to separate.