One Month

A brutal war with some unexpected outcomes

The night the war erupted I was glued to my Twitter feed. On the one hand shocked that Putin had indeed pulled the trigger, on the other amazed that a lot of people kept going with tweets on wine tasting amid the unfolding horrors. Now one month on, I still have hard time to focus on other news and remain captivated by the screen. Voices that were new to me only four weeks ago are now regular check-ins like Kira Rudik, Yaroslava Antipina and (in Dutch) Isa Yusibov. For great reporting I had long followed Oz Katerji, and now checking into him more than once a day knowing his closeness to the action in Kyiv. In North America the Russia expert par excellence Julia Ioffe is really not to be missed, this interview with her on Putin is essential if you want to grasp the dynamics in Moscow. There are many many more of course, but suffice it to say that the news intake has changed fundamentally and will likely not go back to what it once was.

And it will still change quite a bit as events unfold. The certainty of the early days that Russia would do well and win this decisively is gone, but so it seems is the unifying call to action in the West where after a heavy dose of sanctioning Europe is still buying oil and gas from Russia. And the oligarchs now appear to be more concerned about their villas and yachts than getting rid of their pal Vlad. Not that they ever had any chance of doing so, despite all the rumours and unverified news reports, Putin remains in the saddle, surrounded by a a clique of security and military friends who are unlikely to turn on him. That is, until now because on the ground Ukraine is beginning to turn events in its favour. My points stands I hope: the expected or desired outcomes of this mess have not materialized, no, we are seeing a lot of unexpected outcomes pushing us into a new direction and uncharted waters.

Markets

The markets are a good example of that as they have turned as well, look at the Dow Jones and Nasdaq performances over one month of war. About two weeks ago things looked dire, but the bounce back is nothing short of remarkable:

Of course some other things are in play, like certainty of rising interest rates, but it appears as if the markets have settled on the war: it’s not good, but initial shock is behind us and we will go back to some sort of normal. And when the stock markets were bottoming, oil was peaking, only to course correct a bit in the last ten days:

And Now?

So where do things go from here? A cynical views holds it that the US and China are actually cautiously content with the current situation. China has now seen a real life scenario of how the world reacts to an aggressive acquisition plan and will think twice before heading towards Taiwan. At the same time it cannot hurt Beijing’s feelings that Moscow is down and asking for economic help. The US will also see the benefits of the new situation on the ground: Europe is finally picking up its piece of the defence bill, China will take things a notch down and Russia hurts as it is bogged down in the battlefields of Ukraine for a long time to come. Biden and Xi can shake hands: there’s now just two of us.

So it will be a long war, a ‘war of attrition’ is the term thrown around. It may be good for NATO and other countries to not be pulled in and give only limited military support. Good as it may be for the rest of the world and the markets, it is a deadly outcome for the people of Ukraine. Putin will need bring home a result and the more elusive that becomes, the harder he will lash out at literally anything in an already deeply suffering Ukraine. If you want to know what that looks like, look no further than the horrific reports coming out of Mariupol. And that is what we know: there are no means of communications left for those still in the city, the last journalists had to flee as they had become targets for the Russian invaders. Only this morning did we get some confirmation that about 300 people - all civilians - were killed in the Russian attack on the theater serving as a shelter, more than a week ago.

We are in this for the long haul and I will be taking in the news and keep writing about it. Where we can we also should continue to support Ukrainians. At the same time I fear a significant number of people will tune out and go back to wine tasting as this will drag on in the months and years to come.