A Lazy Consensus Is Likely Wrong. The Shock Waves Will Be Big. Why Ukraine Matters.

Why am I so focused on Ukraine?  Partly because it is fascinating.  But more because it is so important to a lot of really important trends. If the cut-off Russian forces don’t hold around Kherson, the shock waves of that collapse will reverberate a long way.

  1. The war is driving a lot.  Economics (Oil/gas/wheat and inflation) and politics (China/US conflict, Europe, US Domestic, etc…).
  2. A lazy consensus – a long grinding war that Russia eventually wins –  doesn’t square with reality on the ground.

If Ukraine runs counter to consensus, a lot of people will have to re-think (and re-price) their expectations for oil prices, gas prices, economic growth, Russia’s geopolitical position in the world, China’s likely policy path, etc etc. 

That is why Ukraine matters.

If you don’t have a view, you are risking a blindside hit to your world view.  Professionally, that would be a dumb risk for me to take.

Yesterday, I thought another Russian collapse around Kherson was increasingly likely.  On this news, the odds just went up.  This is simple stuff to build.  The Russians are getting really desperate if they are buying it in from North Korea.

WASHINGTON — Russia is buying millions of artillery shells and rockets from North Korea, according to newly declassified American intelligence, a sign that global sanctions have severely restricted its supply chains and forced Moscow to turn to pariah states for military supplies. (NYTimes)

It is possible the buy is less about an immediate shortage and more about Russia trying to use Chinese Yuan they otherwise can’t spend.  But that is also significant/interesting economically.  More on that later.


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