This information is a summary from an email that I received this morning from an experienced financial analyst with a military background who also does geo-political analysis. He runs The Macro Ops Collective. He compiled this information from many sources, including eye-witness sources on the ground in Ukraine. I post this information for what it is worth. It provides a contrarian view of what many people assume is happening with the Ukraine crisis. His comments are cited immediately below:
I've been too engaged with the Ukraine-Russia events these past few days to finish the reports I've been working on. I hope to get those out soon (as well as catch up on some sleep!). But I wanted to share some quick thoughts / observations with you in the meantime. This is quick and rough riff, so please excuse the disjointedness.
I've been too engaged with the Ukraine-Russia events these past few days to finish the reports I've been working on. I hope to get those out soon (as well as catch up on some sleep!). But I wanted to share some quick thoughts / observations with you in the meantime. This is quick and rough riff, so please excuse the disjointedness.
- Invasion update:
- It’s difficult to imagine how this invasion could be going any worse for Putin.
- His conventional military, which western intel has long known to be sclerotic and rife with corruption, has proven to be considerably worse than even the most pessimistic assessments (ie, armament has been ditched on roadsides due to lack of fuel because commanders had been pawning it off before the invasion)
- It’s day four of the invasion and Russia still doesn’t have air superiority, which to any armchair military strategist, is astonishing.
- Credible tallies already put Russian deaths at over 3,000, and potentially much higher.
- Its military strategy to date has been terrible. Its execution even worse.
- The only credible explanation at this point is that Putin and his commanders believed their own propaganda. And so their military quite literally expected to be welcomed into Kyiv as liberators. This is not hyperbole. It is the most probable conclusion when objectively analyzing the invasion strategy if one can even call what they’ve executed so far, a strategy.
- The Ukrainian people are some of the baddest motherfuckers alive — that is my full professional assessment. And my heart goes out to them completely.
- Ukraine-Russia negotiations are currently going on at the Belarus border. Putin has lost much of his leverage, which is why he is now standing up his nuclear forces on the border.
- This is terrifying because recent events show that Putin is not mentally well or at the least, not a totally rational actor. We've long known that he's suffered from a serious auto-immune disease, potentially Parkinson and maybe cancer. So the probability of him using nukes is not zero.
- If current negotiations fail (which they likely will) Putin is likely to go full Assad on the Ukrainian people. TOS-1 launchers (incredibly destructive thermobaric missiles) have been stationed outside of major civilian centers for this purpose. This is terrifying and I hope it doesn't come to pass.
- I believe it's high odds that Putin will be found dead of “natural causes” within the coming months. Regime change is looking more and more likely.
- Geopolitical ramifications:
- There is no outcome where this now doesn’t end up as a complete and utter disaster for Putin and the Russian people.
- Even if Russian forces level Kyiv and gain concessions on territorial and security control over Ukraine. They are now a complete and total international pariah. Just as importantly, the perception of Russia as a credible “superpower” has been completely shattered.
- These events have woken up Western leaders in a way that’s been gravely needed. And it is likely to have long-lasting positive ramifications for the western alliance / democracy / NATO, etc...
- Russia is going to be booted off of SWIFT (with energy carveouts) and the ability of the Russian central bank to access the global financial system will be greatly hindered. This will block access to a large portion of the foreign reserves that so many Russia bulls had been pointing to over the last month. Those reserves mean little when they’re denominated in euros and sitting within EU banks that now can’t be accessed. And that gold isn’t worth much if you don’t have counterparties to sell it to.
- China is watching this and not liking any of it. This puts them in a tough spot. It's very likely that Putin made Xi aware of his plans on Ukraine while at the Olympics. And it's likely Xi gave his blessing with the belief that this would be similar to Crimea instead of the international debacle it now is.
- Additional observations:
- Twitter is the most valuable/powerful media/social/information platform in the world (which is not even remotely reflected in its earnings or stock price yet).
- Twitter has allowed the real-time dissemination of valuable on-the-ground multi-source reporting. I’ve been sitting in Twitter spaces that include former US SpecOps who are in country, Ukrainian reporters and NGOs, anonymous USIC personnel, and Russian-Ukraine academics/policy makers.
- This organic collective force has been used to continuously update real-time OSINT (open-source intelligence) in the public sphere. Which, is then being used to great benefit by western and Ukrainian intelligence.
- This has also powerfully catalyzed the Western response. Real-time unfiltered multi-media of Russia’s atrocities sparked a swift and collective moral outrage amongst the public. This has knocked Western leaders out of their catatonic stupor in a way that would not have been possible without this free flow of information.
- What was once Putin’s most effective weapon against the West — our allowance for free and open debate and sharing of information — has been completely turned against him in an incredibly powerful way.
- Market thoughts:
- Lots of vol and noise this coming week
- The ruble is toast
- Stay in high cash and remain nimble/tactical in trades
- Some beaten down tech/growth names are looking very appealing here (more on this later this week)
