Ukraine War... How much will S&P drop this week?

[bovie]

I can't se why the US can't send troops to Ukraine. It did to Iraq and Vietnam and Russia had nukes then too. Only difference is the public was for it then. So really, it just depends on the public (voters). But it's hard to get away from the logic that the US is the dominant superpower in the world. Can it really step down from that. Ah, maybe not for long.

This would be an unrecoverable error. Worst possible move.

Your logic is that we should send troops to Ukraine…because we sent troops to Iraq and Vietnam?

Seriously?

[Kamban]

Right now they are frenemies. Their short-term interests are aligned in that both want to see Western countries weakened on the international stage. But that is where their interests end. As you note, China and Russia have had border clashes in the past, and Russia controls resources in China that China definitely would like to control.

As you noted, their are no true long term friends as far as countries are concerned. We are anti Russia now but should China invade Taiwan, we will be anti China and Pro Russia. And China is supporting Russia now expecting a quid pro quo in the future.

And China wants some resources from Russia too. I saw a Vice documentary about North Korean and Chine laborers working in the logging industry of Siberia and Far east Russia. Each country looks after its own national interest even if it does not align with global interest..

[G]

I think the peace talks thing is interesting. My mind is too simple to think of anything other than, "Dear, Russia, go back home and pay us for all the damages."

In terms of investing: again, is anybody buying Russia? Would it be unpatriotic to do so?

https://www.cnbc.com/2022/02/28/moscows-market-is-closed-but-us-based-russian-etfs-continue-to-trade-stateside.html

[artemis]

I think the peace talks thing is interesting. My mind is too simple to think of anything other than, "Dear, Russia, go back home and pay us for all the damages."

Someone on another site suggested that a deal might include allowing Russia to keep a few Ukrainian territories that border on it and which have a Russian-speaking majority, in exchange for allowing the rest of Ukraine to join the EU and NATO. I can't see Russian going for that, though - but it would be a possible way to allow Putin to save face by declaring at least a partial victory (as he could claim to have liberated the oppressed Russian minority).

In terms of investing: again, is anybody buying Russia? Would it be unpatriotic to do so?

I think buying Russia would be an extremely patriotic thing to do, especially if you promise to replace the current government with a democracy headed by Alexi Navalny. Given the current devaluation of the ruble, you could probably pick the whole country up for a few thousand dollars.

Oh, wait, you mean Russian stocks... I wouldn't touch those with a barge pole right now, but I've already made my sentiments clear upthread. Yours might be different. After all, ordinary Russians aren't evil and they need jobs and material goods, too.

[CordMcNally]

Someone on another site suggested that a deal might include allowing Russia to keep a few Ukrainian territories that border on it and which have a Russian-speaking majority, in exchange for allowing the rest of Ukraine to join the EU and NATO. I can't see Russian going for that, though - but it would be a possible way to allow Putin to save face by declaring at least a partial victory (as he could claim to have liberated the oppressed Russian minority)

On the surface this just seems insane to give up territory to the country that just invaded you for no legitimate reason but I’m sure there’s lots of things we don’t know. I know nothing about the geopolitical climate in those territories. Would a majority of people who live there want to be a part of Russia instead of Ukraine? If so, it actually makes quite a bit of sense.

I’m curious how Putin’s relationships with the Oligarchs will be moving forward. Several have already publicly called for peace which in itself seems like a huge blow against Putin.

[FIREshrink]

Well you should buy when there's blood in the streets. Investors should be buying Russian stocks today, and those in index ETFs are - just like they do every day.

[artemis]

On the surface this just seems insane to give up territory to the country that just invaded you for no legitimate reason but I’m sure there’s lots of things we don’t know. I know nothing about the geopolitical climate in those territories. Would a majority of people who live there want to be a part of Russia instead of Ukraine? If so, it actually makes quite a bit of sense.

The sweetener would be the EU and NATO memberships for what would be left of Ukraine. NATO membership, in particular, would make Ukraine untouchable (as it has the former Warsaw Pact states). And given the current situation, I can't see anyone seriously arguing to keep Ukraine out, as excluding them simply to avoid provoking Putin clearly didn't work, and with their heroism they have certainly earned their membership.

I’m curious how Putin’s relationships with the Oligarchs will be moving forward. Several have already publicly called for peace which in itself seems like a huge blow against Putin.

And I am wondering what Russia's senior military officials are thinking. Putin's waving the nuclear card has got to be alarming them.

If Putin is taken out or if some workable peace agreement is reached (which unfortunately seems unlikely to me), I wonder how long it would take the Russian economy to rebound from the sanctions? I certainly see Europe pivoting away from Russian oil and natural gas even if peace is reached, as this has shown them that resource comes with strings attached. What else does Russia produce other than oil and gas that is in high demand? Whatever those things are, they might make tempting long-term investments.

[zlandar]

On the surface this just seems insane to give up territory to the country that just invaded you for no legitimate reason but I’m sure there’s lots of things we don’t know. I know nothing about the geopolitical climate in those territories. Would a majority of people who live there want to be a part of Russia instead of Ukraine? If so, it actually makes quite a bit of sense.

Looking at a map I can see Putin's viewpoint if real life was a game of Risk. Poland, Czech, Croatia, Hungary, Estonia, Latvia, Lithuania, Bulgaria, and Romania are former Soviet-Bloc countries. Now they are in the EU and NATO. Ukraine has turned sharply to the West since 2014. Belarus could have gone that way except Putin supported Lukashenko after he stole the election and is now his beholden puppet.

Maybe he sees this as his only chance to hang onto Ukraine before it joins the EU and NATO. Putin's calling all the shots in Russia and he is surrounded by a bunch of yes men. When there is no one left to give a dissenting view that causes people to get drunk on their own kool-aid.

[CordMcNally]

If Putin is taken out or if some workable peace agreement is reached (which unfortunately seems unlikely to me), I wonder how long it would take the Russian economy to rebound from the sanctions? I certainly see Europe pivoting away from Russian oil and natural gas even if peace is reached, as this has shown them that resource comes with strings attached. What else does Russia produce other than oil and gas that is in high demand? Whatever those things are, they might make tempting long-term investments.

Cheap vodka? Only kind of kidding.

It looks like energy sources are over half their exports. Other big things seem to be metal/metal products, chemical products, and agriculture products. I’m not sure how easily replaceable the metal and chemical products will be but I think the ag products will prove to be more difficult to replace given how much fertilizer has gone and will go up which will likely decrease yields from using less.

[sealion1]

Cheap vodka? Only kind of kidding.

It looks like energy sources are over half their exports. Other big things seem to be metal/metal products, chemical products, and agriculture products. I’m not sure how easily replaceable the metal and chemical products will be but I think the ag products will prove to be more difficult to replace given how much fertilizer has gone and will go up which will likely decrease yields from using less.

Maybe I'm being too cynical, but I would guess that if Putin backed off tomorrow and just kept those 2 eastern Ukrainian breakway provinces, most of these sanctions will go away. USA/EU will keep some sanctions that sound nasty but have no real tooth to them because they have to show that Russian got punished and Ukraine will join EU but not NATO.

I fear at the end of the day, everyone wants this to stop so badly and go back to business as usual (making as much money as possible) that not much will change. Individual european countries may increase its defense budgets for a few years until everyone forgets in 5 years. I think Putin is refusing to rewind the clock mainly because he's worried about the political fallout at home and the risk of being taken out and replaced. Or he's dying of cancer and he thinks his final contribution to Russia will be taking back Ukraine and maybe nuking the USA, his historical enemy.

[xraygoggles]

The coordinated response from the majority of the world is quite impressive to see, in such a short period of time.

Major oil companies (BP, Shell) reneging on their Gazprom equity stakes; historically-neutral Switzerland freezing Russian assets; Ukraine applying for EU membership; strict sanctions from Europe/US, etc.

Putin seems to be in over his head, and I wonder if he expected this level of synchronized blowback from many sectors: financial, economic, energy etc.

[xraygoggles]

Are you just using the basic ones like SPXL and UPRO and SSO? I don't see how you can hold those for years with the ER drag of circa 1%.

Personally, in bull markets, I think a mix of index and single stocks (esp tech) work plenty fine. I do love the leveraged inverse bear ones as I said above (tomorrow will be very good or very very bad, lol), but that's only for certain really short-term plays. I don't see anything with ER that high and tracking error as being viable for more than short bursts.

Are there leveraged 2x or 3x etc ones (either regular or inverse) with a reasonable ER?

Yep even despite the 1% ish ER, it still should have positive EV - of course it all depends on how the market moves over the next 10-20 years.

I use SSO (2x Spx). Market flatlining for a decade would not be good due to vol drag, but since expected trend for index is up over time, should be positive alpha long term.

[CordMcNally]

Maybe I'm being too cynical, but I would guess that if Putin backed off tomorrow and just kept those 2 eastern Ukrainian breakway provinces, most of these sanctions will go away. USA/EU will keep some sanctions that sound nasty but have no real tooth to them because they have to show that Russian got punished and Ukraine will join EU but not NATO.

I fear at the end of the day, everyone wants this to stop so badly and go back to business as usual (making as much money as possible) that not much will change. Individual european countries may increase its defense budgets for a few years until everyone forgets in 5 years. I think Putin is refusing to rewind the clock mainly because he's worried about the political fallout at home and the risk of being taken out and replaced. Or he's dying of cancer and he thinks his final contribution to Russia will be taking back Ukraine and maybe nuking the USA, his historical enemy.

I think the push to become less dependent on Russian oil/gas has been set in motion and I don’t think it’ll stop. It’ll take decades to implement but I honestly think that’s a done deal.

[CordMcNally]

The coordinated response from the majority of the world is quite impressive to see, in such a short period of time.

It’s reassuring, at least to me, on how quick everyone got on the same page. It gives me confidence in their information and intelligence gathering.

[Max Power]

I jettisoned over half of my shorts today when the market was down 1.4% or so to lock in some gains, so now it will likely keep dropping, lol.

I plan to probably short tomorrow also depending how things open, probably short for part of the day... definitely pull all before Tues close and State of Union tomorrow night though.