Dark Days Ahead in Ukraine
Author: Greg Valliere
October 25, 2022
PLUS IT’S GETTING COLD, with nightly lows in the 30s (or low-single digits in Celsius) forecast by the end of this month in Ukraine, with even colder temperatures coming — compounded by an energy infrastructure that has been battered by Russian missiles.
UKRAINE NEEDS A MORALE BOOSTER, and it may come in the next few weeks as its troops encircle and occupy Kherson, a key city in the south. Russian military officials on the ground reportedly want to abandon the city, but Vladimir Putin has ruled out a surrender.
THAT DYNAMIC CONTINUES TO BE THE SINGLE MOST important factor in this ugly war — Russian troops aren’t willing to die for Putin, while Ukrainian troops are willing to die for Volodymyr Zelensky.
BUT ZELENSKY NEEDS UNIFIED SUPPORT from the West, and there’s been wavering in several countries — including the U.S. A minority of Republicans have been questioning the cost of military aid to Kyiv, and yesterday leaders of the Congressional Progressive Caucus, in a letter to President Biden, called for negotiations between the U.S. and Russia.
THIRTY LIBERAL DEMOCRATS, led by Rep. Pramila Jayapal (D-Wash.), chair of the CPC, asserted that the war has driven up prices of grain, natural gas, raw materials, etc. And some GOP Trump supporters running in this fall’s election are questioning huge U.S. outlays — close to $60 billion — for Ukraine.
THE PROGRESSIVES WALKED BACK THEIR letter within hours, stating that they support Ukraine after mainstream Democrats reacted angrily. But Putin may be thinking that the U.S. may be wavering on huge aid for Ukraine, just as citizens of Western Europe voice objections to the inevitable sacrifices they face this winter.
PUTIN, MEANWHILE, MUST KNOW THAT the hard liners in Moscow have limited patience. He has bowed to the hawks, appointing the brutal Sergey Surovikin as the new commander of operations in the war, and he has gotten much closer to Yevgeniy Prigozhin, the founder of a Russian mercenary group who is playing a critical role; he has been identified as the leader of the notorious Wagner group.
THE FOG OF WAR: Top military officials in the U.S. and Russia have spoken to each other in recent days, as fears grow that Russia may spread unfounded speculation about Ukraine’s willingness to use a “dirty bomb.” This could be used as a pretext, Western leaders fear, for Russia to detonate such a bomb, which would spread radioactive material.
BOTTOM LINE: At some point there will be a truce and negotiations, but that doesn’t appear to be imminent as the war seemingly escalates. An intermediary — possibly Turkish president Erdogan — would have an enormous task, especially since both Ukraine and Russia adamantly claim that Crimea is theirs.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2022 AGF Management Limited. All rights reserved.