The Game in Ukraine


We have been watching the mess in Ukraine grow in potential scope over the past 3-4 weeks. The mess is either solidifying into a swamp or melting into a less toxic mess depending on your view point. One difficulty for us has been the inability to decipher which faction around President Biden is more influential at this moment & what are their blind spots. In that context, we were struck by the views expressed by ex-Admiral Stavridis, the former Supreme Allied Commander of NATO on CNBC.


CNBC Anchor Kelly Evans asked at minute 1:15 of the above clip –  “… what’s about to happen? ..”; The former Supreme Commander of NATO replied:

  • 25% chance, we see an all-out Blitzkrieg by Vladimir Putin; he goes to Kyiv, he changes the regime; dramatically upends European security;
  • 50% chance he will conduct some kind of invasion, carve out a chunk,
  • 25% chance we may be able to work through this diplomatically

He added 75% chance of massive sanctions against Russia, Putin, Russian oligarchs and only water will flow through Putin’s cherished Nordstream 2 pipeline. For some reason known only to CNBC webmasters, they deleted the last statement of Stavridis in which he dismissed any issue with China by saying China is a “stable” situation. 

To interject our own opinion, USA is focused on China as an existential military-economic adversary but one that cannot destroy America at least now. America respects China and is willing to deal with & compete with China.

There is also a  smaller but highly entrenched faction in US foreign policy that has both hatred & contempt for Russia. This faction understands that Russia is the only country that can destroy America but only at the cost of total destruction of Russia. So they don’t consider that MAAD possibility as high. On the other hand, they know that Russia is a minor power vs. America in conventional military strength. That is why this faction is willing, some say eager, to confront Putin’s Russia even to the point of a limited conventional war. 

This faction tried to get President George W. Bush to confront Putin’s Russia when Putin essentially took over provinces in Georgia called Abkhazia and South Ossetia in a fast 4-day military action.The Russian forces did not even approach Tbilisi, the capital of Georgia.     


President Bush wisely refused to take the bait & President Sarkozy of France negotiated the ceasefire agreement. Fast forward to 2014 when Ukrainian President Viktor Yanukovych fled Ukraine after massive protests and a new anti-Putin government took power. 

Russia retaliated by annexing the province of Crimea & later supported pro-Russian separatists in the Donbas region bordering Russia. The anti-Russia faction tried to get President Obama to intervene which he wisely refused. President Bush & President Obama were in power both in title and in reality. They could decide where to intervene & where not to.

The situation is different now. We have no clue which faction is running the U.S. show in Ukraine-EU sphere. President Biden has been prone to say opposing views that are promptly corrected by his spokesperson. The lack of centralized decision-making in Washington DC has created a nasty situation in Ukraine & EU, the scope of it can be seen by the graphic below from dailymail of UK:

Clearly Putin’s Russia is & has been in position to, at least, try to take over much of Eastern Ukraine including the capital of Kiev. That raises the big question:


1.What’s he waiting for?

Think back to the Russian military actions in Georgia-2008 & Crimea-2014. Putin decided quickly and acted even more quickly. The “invasions” were complete & over before America  had any chance to intervene.  

So if Putin had any desire to “invade” Ukraine, take Kyiv (Kiev) or even the provinces adjacent to Russia, why did he wait? George Friedman of Geopolitical Futures discussed this in his article this week titled The Russian Mystery:

  • “Moscow started with a relatively slow deployment of forces along the Ukrainian border. It appeared to be in a position to invade Ukraine with minimal opposition. Rather than attack, though, Russia engaged in a diplomatic confrontation with the United States, demanding that Ukraine never be admitted into NATO, and that NATO limit its deployment of weapons in Eastern Europe.”
  • It doesn’t make sense for Russia to delay military operations while making demands it knew were going to be rejected, especially since its military was already deployed. Why would Russia, if fully committed to entering and occupying Ukraine, give the West time to prepare military countermeasures? “

And Ukraine is not a small municipality to be taken quickly & lightly. As Friedman explains,

  • ‘An invasion of Ukraine is difficult in the best conditions. The country is roughly the size of Afghanistan, and coordinating a complex armored operation presents untold opportunities for failure. … Air and naval forces and anti-tank weaponry, for example, could dramatically complicate the invasion. … In an operation of this magnitude, the attack should be made as early as possible. By waiting, Russia increased the risk of failure.”

Understand that Putin simply cannot accept failure because it would mean the end of the Putin regime, an existential risk for him. So George Friedman writes:

  • “The only conclusion to be drawn is that Russia has no intention of invading Ukraine, as Deputy Foreign Minister Sergei Ryabkov has repeatedly said. Given that Russia failed to act when it could and arguably should have, it seems to me that he might have been telling the truth.”

But, in our opinion, Putin cannot simply back off & signal that a military option is off. 


2. What might be a fallback goal?

How about reopening something that has already been adjudicated? We speak of the 2018 Kerch Straits incident. The red dot in the map below is the Kerch Strait, a critical link for Ukraine’s eastern ports in the Azov Sea to the Black Sea. Russia built a bridge over it in 2018. Then Russia fired on & seized 3 Ukrainian boats & detained arrested 24 Ukrainian sailors. So there is recent precedence to Russian military exercising its control of the Black Sea against Ukraine.

Now follow the black line on the left to the port from where the Ukrainian boats came. The name of that port reads Odessa. How Russian is the heritage of Odessa? Per Wikipedia,

Now look at the broad map of the Black Sea and trace the “conquests” of Putin:

With first the 2008 acquisition of Abkazia in Georgia & second the 2014 “return” of Crimea with the port of Sevastopol, the door is now open for Putin to take the port city of Odessa, the 3rd most populous city in Ukraine and the big gateway for Ukrainian grain. 

What about the country of Moldova, you ask? Sure they will be furious. But look again & notice that the orange part of Moldova that borders Ukraine has already broken away from Moldova as the state of Transnistria with the assistance of Russia. So Odessa is neatly sandwiched between Russian ally Transnistria & Russian Crimea far away from the Ukrainian military positions guarding the north.

Notice that the above dailymail map shows 12 battalions (about 10,000 troops) already deployed to take Odessa with the support of the Russian Black Sea fleet. While nothing is easy in military operations, it does seem that taking Odessa would be much easier for the Russian military than attacking Kyiv with armored tank columns. And no one is even talking about Odessa or the Southern Ukraine coastline. Not even Admiral Stavridis in his discussion on CNBC.

What would Odessa give Putin? With their current control of Crimea & the Kerch Strait, Russia would be able to control or stop Ukraine’s grain exports in addition to Russia’s current control of Ukraine’s energy. And Ukraine would become a land-locked country surrounded on three sides by Russia & Russian “allies”. 

A heck of a fallback prize, we think!


3. A Destabilized Ukraine?

While the anti-Russia faction embodied by ex-Admiral Stavridis is focused on military invasion by Putin, the authorities in Ukraine are getting increasingly worried about the risks inside Ukraine. Zalensky, Ukraine’s President, reportedly disagreed with President Biden about the risk of an imminent invasion by Russia and has now taken to begging the media to stop with the “panic”. Below is a 2:36 minute clip from France 24, a French Public Broadcast service. Listen to all of it:


Besides Zalensky’s begging, you hear the reporter say that

  • “… the panic is having a terrible effect on Ukraine’s economy; he [Zalensky] said he is currently having to spend 4-5 billion dollars propping up Ukraine’s currency which is sliding as a result of lack of investor confidence in the country & the effect here & now on Ukraine’s economy … “

You will also hear the anchor quote Zalensky as saying “… greatest risk for Ukraine is the destablization of the situation inside the country … “. 

People forget that Russia & Ukraine are essentially the same people with the same Kievan Rus culture. And the first name of Zalensky is Volodymyr while the first name of Putin is Vladimir. In case you didn’t notice, there is a town named Vladimir in the top right of the orange Kievan Rus region above.

So if Zalensky is so sick of the “invasion” panic created by the Biden administration, how sick must  ordinary Ukrainians be? 


4. Backlash against America

The greatest American asset used to be green or U.S. Dollars. Is there any chance that the Biden Administration would be able to send $10 billion to Ukraine to alleviate the damage to Ukraine’s economy? No way, we say. So how can this mess create anything but ill will & disrespect for America within Ukraine?

Now focus on Western Europe or France-Germany. Macron of France is speaking with Putin and Germany is distancing itself from this war effort against a Putin “invasion”. The Biden Administration seems oblivious to the reality of today’s Europe that has “ceded control of their power crisis to Russia“, as veteran investor Kyle Bass said on CNBC this week. Bass added, 

  • “It is important to note that the Nordstream 2 pipeline & Europe’s reliance on Russia for their energy needs is going to drive a wedge right through NATO and right thru the European Union itself

What about the boast of ex-Admiral Stavridis who snorted on CNBC that only water would flow through the Nordstream 2 pipeline? Guess he doesn’t know or care that the “price per megawatt hour in Europe is almost 10 times that in the USA“, as Kyle Bass pointed out. 

Regardless of how Ukraine turns out, there is one leader smiling & getting happier by the week – China’s Xi Jin Ping! Ask yourselves – have you heard even a boo against China since this Ukraine game began? And now Putin is going to China for the Winter Olympics. FDR must be turning over in his grave!




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