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Russia/Ukraine conflict

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Given the continuing discussions about resilience or lack thereof in the Russian economy it seems appropriate to note the posted results of UK listed Tinkoff Bank. They have had unusual results among Russian banks and have grown from nothing to become one of the world’s largest online banks. Their resilience has useful insight into Russian domestic economy up to the end of last year. 2023 apparently has not had, thus far unusual strains on them. Management is essentially the same people who were there when it was formed in 2008, although shareholding has changed with the exit of Oleg Tinkoff, the founder, who is no longer in Russia.

The enormous strains of the war have been having huge consequences, as we often discuss. But, much of Russian business goes on with essentially ‘business as usual’, on the surface and in much of daily life.

Perhaps many of us are overly optimistic about the domestic strain resulting from the war. Frankly, the creativity of much of Russian business is proving much more resilient than we have imagined. The BRICS and their aspirants are trading with Russia, to their mutual benefit.
Boycotts and embargos work less well today. Even EU members like, for example Hungary, see no alternatives to Russian gas. When an Aeroflot B777 needs a new undercarriage, boycott or not, it appears. Chips from Pacific atolls, no problem.

Just as General Motors and IBM supplied Nazi Germany, these sanctions are growing more porous and less effective, just as the deleterious effects of the war are hitting both Russian and Ukrainian military resilience.

Sorry to be so pessimistic today. We can only hope the F 16’s etc begin to change the outlook, even before they actually arrive.

Countries have historically found ways to keep the economy from completely collapsing during wartime, but once the war is over the chickens come home very quickly.

Both Germany and Japan keep producing weapons right up until the war ended. Both had most of their factories bombed out and were doing all sorts of ad hoc manufacturing where ever they could. Germany was using caves and old mines for manufacturing. The Japanese had civilians combing the countryside digging up tree roots so they could make turpentine for aircraft fuel. The countries had pretty poor economies by 1945, but their economies were still ticking over.

In Germany food was getting scarce near the end. Allied POWs who wrote their stories after the war talked about how hungry they were in 1945. But the Germans were still able to barely feed their civilian population. When the war ended famine started to set in though. The Allies scrambled to feed the German public.

A lot of stories I have seen from German civilians said things got much worse after VE Day. A neighbor growing up told my parents her story. She was living in Eastern Germany at the end of the war and the Russians just started raping all the women. A commissar came in and tried to restore order. He hanged a bunch of the worst perpetrators, but they had all participated. In the Russian sector rape and looting was the norm after VE Day.

In the western controlled sectors things were a bit better, but trying to keep the civilian population from starving was a major project in itself. What was left of the economy just stopped dead on VE Day.

I expect that no matter how bad things get economically Moscow will be able to keep the economy stitched together as long as Moscow can hold the country together. If rebellion gets going in Russia, I think things will unravel very fast.

As far as American companies doing business with the Nazis, in 1938 Texaco threw a big party to celebrate the big contract they signed with Germany to sell them oil. Texaco was notorious as the cheapest of the big oil companies. They almost never did anything to support charities, but they became so embarrassed when the war started that they started supporting the Metropolitan Opera to try and divert attention from their blunder.
 
Now is also a good time to start training future Ukrainian fighter pilots who may not be graduated for a couple years. Ukraine should hopefully have 100+ F-16s by then. NATO and other countries should commit to all required training resources.

Keep tightening the screws on Russia and continue to plan long term...
 
General Hertling yesterday made the following encouraging predictions:

-Ukraine will see significant tactical breakthroughs on 1 or 2 axis of advance in the next few weeks.

-the will continue to advance slowly on E & SE fronts…then will see a “surprise” success, likely in Zaporizhzhia Oblast.

-Ru forces won’t be able to reinforce a key area on the “Suvorikin line,” which will contribute to UAF success.

-support for Putin in RU will continue to decline & by Christmas he’ll be in dire straits in Moscow.

-western support for key “ground” support will continue.


https://x.com/markhertling/status/1693608430236258461?s=46&t=jAgIffgC68qiSzAyPG4hEQ
 
Legit differing views (which often is the case with senior military leaders), CYA article leaked to offset Administration’s negative press for late arrival of key arms and/or Ukr failure to quickly succeed (as pointed out by WSJ editorial recently), or xxxxx:

 
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