Ukraine/Russia, Fog of War, Conflicts of Interest and This Market
Easy does it as markets feel a bit like they’re in no-man’s land. Let’s be patient just now and wait for the next great pitch, which is, as always, coming if we’re looking for it. No trades for me today.
Today’s headlines are full of concerns about the still escalating Ukraine/Russia crisis, and stocks are down a bit across the board.
- S&P back below 2,000 on Ukraine fears
- Oil turns higher on Ukraine
- NATO says Russia is taking a more overt role in Ukraine
- Kiev says Russian troops have entered eastern Ukraine
- U.S.: Russian denials over Ukraine are ‘absurd’
- Europe stocks slide
The fog of war is thick now, which makes the markets less certain, which over time can contract multiples and bring down valuations. I’ve talked before about how we are in a currency war and how the “fog of war” is building, making this and other geopolitical conflicts potential Black Swan events.
When the Ukraine/Russia crisis started heating up a few months ago, I wrote:
Missing from today’s headlines are Ukraine, Russia and their dealings with the U.S. That might be off the front page, but it’s still inflammatory over there and it’ll probably be back headlining soon, if I had to guess. And doing what I do for a living, trading and investing and writing about it, means I do have to guess. I wouldn’t be surprised if we get a chance to buy on day when the markets are down 2%-3% the next time Ukraine, Russia and U.S. tensions flare. Keep it on your radar.
And you can bet that there will be continued escalation and US involvement in Ukraine. Did you forget this all-important factoid about Ukraine/US ties and the conflicts of interest therein?
Biden’s Son Joins Board of Gas Company Linked to Ousted Ukrainian President — The facts: Ukraine Energy Co. has lots of “legal rights” to lots of energy fields in Ukraine. If Russia takes over Ukraine, those “legal rights” will be gone forever. Best way to save your company? Weeks after Joe Biden visits, you appoint his son to your Ukraine Oil Co, and now the U.S. will say its got U.S. interests in Ukraine. Much more “aid” from U.S. taxpayers to support the Biden kid’s company and the regime now in power in Ukraine and perhaps a full blown war in Ukraine is the most likely outcome with this development.
It’s crucial to be aware of as many interests at play as possible. At any rate, I’m not making any major changes to my portfolio as a result of this analysis. But Ukraine/Russia/US tensions remain a volatile piece of our puzzle as well as being something to pray about.
