Update for the 3rd of May, 2022

The number of inconveniences and delays I’ve been through to make this thing today has been almost comical, but I am a man of focus, commitment, and sheer fucking will.

I think this has some juicy dipshittery in it, if you’re the sort of person that eagerly awaits that section.

Economically

These six pieces form a nice story.

EU Rejects Russia’s Ruble-For-Gas Scheme, Warns Of Supply Shock ¹

At the conclusion of its Monday meeting, the European Union has said it will not heed Russian demands to pay for gas in rubles, with a mid-May deadline for payment looming. The bloc also warned its member states to prepare for Russia to cut off gas to all members.

The U.S. Shale Patch Is Facing A Plethora Of Problems ²

The U.S. government appears to believe that the country’s shale production can be raised simply by throwing enough money at the problem. This assumption fails to understand that not all the problems currently faced by drillers are financial, with some drillers simply unable to get their hands on the material they need to boost production. These companies are also suffering from a lack of high-quality acreage and, in some cases, are struggling to secure financing.

US natural gas production growth wanes as need arises ³

Falling Inventories Could Stifle U.S. Plans To Help Europe Replace Russian Oil ⁴

The U.S. energy industry has taken its role of savior of Europe seriously. After boosting LNG exports to a record because of Europe’s thirst for energy, oil exports from the U.S. are now on the rise, as well, but the trend may not be sustainable. Since July 2020, Kemp noted, U.S. oil inventories had declined by 421 million barrels. Strategic oil reserves are also low, and fuel inventories are below the average for this time of the year, especially in distillates, which are 30 million barrels below the average.

OPEC Has Missed Its Oil Output Target Once Again ⁵

Force majeure in Libya and under-production in Nigeria have led to a much lower increase in OPEC production for the month of April than was called for by the cartel’s supply agreement.

Can Brazil Help Fill The Supply Gap Left By The U.S. Ban On Russian Oil? ⁶

Since President Joe Biden floated the idea of banning oil imports from Russia in response to President Vladimir Putin’s invasion of Ukraine there has been considerable speculation as to which countries can fill the supply gap. … Venezuela … Guyana, Ecuador, and Colombia have also been considered by analysts as well as industry insiders as potential sources of the additional crude oil needed to fill the supply gap. All three South American nations despite possessing burgeoning hydrocarbon sectors lack the capacity to rapidly ramp-up output to meet growing U.S. supply needs. Latin America’s largest petroleum producer Brazil, however, is a different story. Brazil’s hydrocarbon sector proved resilient to the COVID-19 pandemic which sharply impacted petroleum operations in other jurisdictions in the region including Colombia, Ecuador, and Argentina. Latin America’s largest oil producer was the only country in South America to report an increase in petroleum production during 2020 …

Europe

EU Consider Exemptions As Hungary Threatens To Veto Russian Oil Ban

As Hungary threatens to veto a European Union-wide ban on Russian energy products, the bloc is now considering exemptions for Hungary and Slovakia, or a longer timeframe for the two countries to reduce their heavy reliance on Russia. Slovakia and Hungary have been among those EU members staunchly opposed to a ban on Russian oil due to their very high dependence on Russian imports.

Bulgaria and the Czech Republic want to request an exception for themselves from the embargo on the import of Russian oil, AFP reports, citing EU diplomats.
LNG supplies from terminals to Europe in April hit fresh all-time high for this month, totalling 10.65 bcm, compared to the last high of 10.21 bcm in April 2019. ⁷

Germany’s unemployment numbers dropped by 13,000 instead of an estimated 15,000. ⁸

One of the largest banking groups in Germany, DZ Bank Group, has resumed operations with Russian banks.
Spain and Portugal separate their electricity prices from the rest of Europe, which is expected to halve power bills for 40% of the population, which is a brake on the EU’s drive to unify energy markets and turns them into an “energy island”. ⁹

Prime Minister Boris Johnson says the UK will build one new nuclear plant a year ¹⁰

Italy unveils new stimulus plan as economic outlook darkens ¹¹

The decree approved by Mario Draghi’s cabinet deploys 14 billion euros ($14.71 billion) of stimulus, ranging from state guarantees on bank loans to a one-off “bonus” of 200 euros for millions of low and middle-income Italians.

Ayy, I’m going into a recession ova' here!

Russian gas deliveries via Ukraine hit 5-month high ¹²

Russia Could Sell More Energy to Asia, but Has to Slash Prices ¹³

The European Union has allocated €8 million to Moldova for “support of independent media”.

Asia and Oceania

Singapore’s PM says that there will be economic challenges in the year ahead, speaking to unionists at the May Day Rally, saying that there may be a recession within two years. ¹⁴

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“The fundamental solution… is to make ourselves more productive, to transform our businesses, to grow our economy, to uplift everyone,” he noted. “Then our incomes can go up, and that can more than make up for higher prices of energy and food. Then we can all become better off in real terms.”

In his speech, he outlined the Government’s measures to alleviate cost-of-living pressures on Singaporeans. These include the $560 million Household Support Package announced at Budget 2022, which comprises U-Save and service and conservancy charges rebates and Community Development Council vouchers to reduce living expenses for nearly all households – with lower- and middle-income households receiving more.

Singapore is also taking steps to secure its own food and energy supplies, in the event of these being disrupted by the ongoing Russian invasion of Ukraine, which started on Feb 24.

Japan is suffering due to its own sanctions and its Ukraine policy, as Japan relies on Russian LNG, has announced a $48 billion economic package that economists think will have only limited effect, and the yen falls. ¹⁵

Australia hikes its interest rate for the first time in more than a decade, to 0.35%. ¹⁶

India’s top steelmaker will stop importing Russian coal due to ‘uncertainties’ created by Western sanctions on Moscow ¹⁷

Middle East

Pakistan and Saudi Arabia will discuss the possibility of augmenting the latter’s $3 billion deposit into Pakistan’s central bank, designed to help augment Pakistan’s foreign reserves. ¹⁸

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With a yawning current account deficit and foreign reserves falling to as low as $10.8 billion, the country is in dire need of external finances.

Pakistan also welcomed a Saudi decision to extend an agreement to finance exports of crude oil products and oil derivatives, Saudi state news agency SPA reported.

The two sides also agreed to give priority to political solutions that bring prosperity and progress to the region and its people.

The Kingdom of Saudi Arabia welcomed the statements of Pakistan mentioning its keenness to find a solution to all disputes with India, including the Jammu and Kashmir dispute.

Kazakhstan’s Deputy FM says that there will be no continuing disruption to the reliable supply of their oil, which had been previously shut due to storm damage. He also pointed out that the country should remain a crossroads for China and Europe and have good relations with both. ¹⁹

Africa

The IMF has warned that 20 African countries are at a high risk of debt distress or are already in it, indicating that they cannot fulfill their financial obligations, which would eventually lead to debt restructuring. ²⁰

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“Sub-Saharan African economies were growing very strongly in 2021. We were expecting the region’s average growth to come out at around 3.7 per cent for 2021. It turned out to be 4.5 per cent. And most of that positive surprise, or that momentum, started in the second half of the year.

“But what the war in Ukraine has done, is to put a halt on that momentum. It led to a significant increase in commodity prices, more volatility in global financial markets.”

“And this is the first time since 2009 that we have this double- digit projection for inflation. And it reflects mainly higher food prices and higher energy prices.

Nigeria recorded significantly more oil production over the last few months, due to less shutdowns due to sabotage, force majeure, crude production assets' breakdowns, and community issues. ²¹

OPEC and Russia are ready to invest in the Nigeria-Morocco gas pipeline project, an extension of the current pipeline that reaches into Ghana. ²²

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Commenting on securing funding partners, the minister said, “we have not totally concluded on the financial arrangement. I have just said that a lot of people are showing interest. There is a lot of international interest, investors interest in the project, but we have not really identified investors that we want to go with.

“For the moment, the two investors in this project are Nigeria and Morocco, we are the two countries that are ready to come together to develop this pipeline and a lot of other investors are also interested in having a piece of the action.

“The Russians were with me in the office last week, they are very desirous to invest in this project and there’re lots of other people who are also desirous to invest in the project because this is a pipeline that is going to take our gas all through a lot of countries in Africa and also, all the way to the edge of the African continent where we can have access to the European market as well.

“OPEC is interested in the project and has indicated its interest, but there are a lot of other people that have indicated interest as well. We are at the level of study and the studies will let us know how much investment will be needed for this and every other thing before we can now approach investors that are interested as well”.

North America

Eric Schmidt, ex-Google chief, says that the USA needs to up its game in the competition to beat China in the age of AI, which he claims that Beijing is already “training hard” for. ²³

Biden’s top trade negotiator Katherine Tai has said that relief from US tariffs on China is one option under consideration to confront the fatest inflation in four decades.

Tai dismissed March research from the Peterson Institute for International Economics, which estimated that eliminating a wide array of tariffs, including those on Chinese goods, could reduce inflation by 1.3 percentage points. “I really have to challenge the premise of that study,” Tai said. “I think it’s either something between fiction or an interesting academic exercise.”

Fed Needs to Do More Than Raise Interest Rates ²⁴

The Hideous Strength of the U.S. Dollar ²⁵

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“It’s our currency, but it’s your problem,” was the 1971 message from John Connally, Richard Nixon’s treasury secretary, to U.S. trading partners dismayed by the dollar’s then weakness. What was true then remains true today, albeit in the opposite direction with the greenback having risen 6% in April and 13% in the past year to its strongest level for two decades against a basket of major currencies. The Federal Reserve needs to be mindful of the threat to global growth posed by the U.S. currency’s rapid ascent.

The greenback is the logical haven for investors seeking financial refuge from a confluence of global shocks that started with the pandemic and has been intensified by Russia’s invasion of Ukraine, culminating in an energy and food price surge. King dollar rules supreme as the Fed maintains a policy of benign neglect in the currency market, having provided almost limitless access to dollar liquidity for central banks around the world in the past two years.

Bar a handful of outliers, including the Brazilian real and the Peruvian sol, the dollar is omnipotent versus pretty much every currency in both the developed and developing world. That’s putting the squeeze on policy makers everywhere to defend their currencies or risk importing yet more inflation into their already beleaguered economies.

The Fed’s monetary policy is dictated by the needs of the domestic economy. With inflation, the most important element of its mandate, surging by 8.5% in March, the U.S. central bank is expected to follow March’s quarter-point interest-rate rise with accelerated half-point increases starting this week. The futures market anticipates a Fed funds rate of at least 2.5% by year end, up from 0.5% currently; the dollar’s ascent reflects expectations for a shift in interest-rate differential with other countries.

The stronger dollar is also doing the Fed’s work in combating inflation by tightening financial conditions on a trade-weighted basis. Although the U.S is the world’s largest economy and a huge importer of goods, it is relatively insulated from the global energy and food price shock by its domestic production of fuel and foodstuffs. It also benefits because all major commodities are priced in dollars. It’s everyone else’s problem if raw materials suddenly become more expensive in their respective currencies.

The world has suffered bouts of an overly strong or weak dollar several times during the past half-century. The explosion in oil prices in the 1970s culminated in a global recession, exacerbated by the aggressive rate hikes implemented by Paul Volcker’s Fed. His inflation-beating policies in turn resuscitated the dollar into the mid-1980s: The perceived advantage that delivered to the exporting nations of Japan and Europe versus American industry led to the 1985 Plaza Accord, which dramatically reversed the dollar’s strength and boosted the U.S. economy at the expense of other nations, particularly Japan.

The current weakness in the currencies of Japan and Europe would typically be welcomed for juicing their exports. But the recent slippage in the Chinese yuan, the world’s second-most important trade-weighted currency, puts matters into a different league. All three regions are facing an unusual and potentially intractable problem of imported inflation. There’s a clear and present danger of rising prices slowing global economic growth to the extent that a recession is possible, and stagflation a real risk.

“The dollar’s rally is like an uphill avalanche,” according to Kit Juckes, a currency strategist at Societe Generale SA. “Just as an avalanche picks up snow, rocks, trees and anything else in its path as it slides down a mountain, the dollar’s rally has the knock-on impact of causing more currencies to weaken. A broad-based move, though, tightens global monetary conditions, and so downside economic risks grow.”

At some point this will start affecting the U.S. economy and become relevant to Fed decision-making, but that could take a while. Sure, U.S. gross domestic product surprised on the downside by declining at an annualized rate of 1.4% in the first quarter. But this was due to a surge of net imports, no doubt helped by the extra purchasing power of a stronger dollar, combined with a slump in exports.

With the Fed’s balance sheet still at nearly $9 trillion, there are plenty of dollars swimming around. The central bank is expected to start actively selling its bond holdings, possibly as soon as this summer, which may reduce overall liquidity and, counterintuitively, make the dollar less of a haven. Fewer dollars should in theory boost its value, but the world needs to become a better, safer place before the greenback’s uptrend meaningfully reverts. For the sake of the global economy, here’s hoping King Dollar’s crown starts to slip.

US factory activity grows at slowest pace in nearly two years ²⁶

Biden administration announces $3.1 billion to make electric vehicle batteries in the US ²⁷

The funding, part of the Bipartisan Infrastructure Law enacted last year, will aid plans by U.S. companies to build new factories and retrofit existing ones to make EV batteries and related part

With Emissions Soaring, Democratic Governors Sour On Plans To Shut Down Nuclear Power ²⁸

Virtually every place that shuts down nuclear plants — from San Diego to New York City, Germany to South Korea — replaces them with fossil fuels, swapping an abundant source of zero-emissions electricity for the very energy sources roasting the planet. But with gas prices and emissions on the rise, two governors [Gavin Newsom and Gretchen Whitmer] are rethinking plans to shut down major nuclear power stations.

South America

Lula proposes the creation of a Latin American currency ²⁹

“We don’t have to depend on the dollar,” said the Workers' Party (PT) leader during a speech at the congress of the Socialism and Liberty Party (PSOL), a nationwide organization that supports Lula in the October elections, in which President Jair Bolsonaro will seek re-election. “We are going to restore our relationship with Latin America. God willing, we will create a Latin American currency”, the PT leader told thousands of citizens.

Global

NakedCapitalism: Indian Heatwave May Exacerbate World Wheat Crisis ³⁰

The current heatwave appears to have dashed optimistic expectations that India might increase its wheat exports. India’s focus must instead remain on meeting its domestic food needs. In no way can the government allow a chase for higher wheat export prices to compromise the food security of ordinary Indians. And over the longer term, the worst case scenario outlined in the Zachariah et al paper suggests that with increased heat stress being an expected part of India’s climate future, lower wheat yields might also soon follow.

Preparing For The Dark Clouds Looming Over The Supply Chain ³¹

Bird flu puts organic chickens into lockdown from Pennsylvania to France ³²

Diplomatically and Politically

Involving Ukraine or Russia

A top Kiev official claims Hungary was informed of the Russian attack in advance and wants to take Ukrainian territory ³³

Hungary’s State Secretary for International Relations denies this, calling it a “fake”, and that this is an attempt at retribution due to Hungary’s position that they won’t give weapons to Ukraine.
The Kiev regime is preparing to officially withdraw from negotiations with Russia
A fire broke out at the warehouse of a pro-Kremlin publishing house near Moscow. ³⁴

Ukraine’s Zelenskiy says Russia forgot World War Two lessons. Okay, to be fair, this is referring to Lavrov’s statement that Hitler was part Jewish. I was slightly scared that he was talking about the military situation. ³⁵

Moscow Accuses Israel Of Supporting ‘Neo-Nazis’ In Ukraine After It Seeks Apology For Lavrov’s Claim About Hitler ³⁶

The Russian Foreign Ministry on Tuesday accused the Israeli government of supporting neo-Nazis in Ukraine marking a major escalation in a diplomatic row between the two countries after Israel sought an apology from Russia’s top diplomat Sergei Lavrov for claiming that Adolf Hitler had Jewish origins.

Europe

Greece lifts COVID restriction requiring proof of vaccination or negative test for domestic and foreign flights, and allows 100% capacity for restaurants. ³⁷

Greek workers protest at energy cost surge in May Day rallies ³⁸

63% of Britons believe that CEOs should be paid no more than 10 times the earnings of lower- or mid-ranking employees, with only 3% saying that it’s appropriate for CEOs to be paid more than 50 times the company’s average pay. Currently, the average ratio is something like 53 times the average pay. ³⁹

The Pope says he wants to meet Putin personally to try and stop the war, but has not received a reply. ⁴⁰

Olaf Scholz holds off on Ukraine visit, citing diplomatic snub ⁴¹

German Chancellor Olaf Scholz said Ukraine’s decision last month not to welcome German President Frank-Walter Steinmeier “stands in the way” of him traveling to Kyiv.

Asia and Oceania

Over 50% of Japan’s nursery schools predict trouble staying open due to population decline, and 10% already finding it difficult. [^ ] https://archive.ph/d0PP2
Taiwan cuts Covid-19 quarantine for arrivals even as cases rise ⁴²

2 more people are pulled alive from the collapsed building in China. ⁴³

China’s top nuclear envoy, Liu Xiaomang, is to discuss political solutions to North Korea issues on Seoul visit. However, Liu has said: ⁴⁴

“China has played a positive role in addressing the Peninsula issue and will continue to do so in its own ways. However, the key to resolving the issue is in the hands of the DPRK and the US.”

Sri Lanka’s President agrees to form an interim government with new PM and cabinet. ⁴⁵

The Solomon Islands will supervise Chinese police operating in the country, says an official. ⁴⁶

Japan and Thailand announced a new defense agreement, which would involve the transfer of defense hardware and technology from Japan to Thailand. They also announced a draft of a five-year economic partnership. ⁴⁷

Biden’s Indo-Pacific Framework: ‘Cloud cuckoo land’ ⁴⁸

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Aristophanes lives. Delusive optimism, unmoored to reality and lampooned in the Greek playwright’s “The Birds” at this point seems to be an apt metaphor for the Biden administration’s highly anticipated Indo-Pacific Economic Framework (IPEF). As now configured, trade experts in both the US and Asia have described the IPEF variously. At best, the Prime Minister of Singapore views it as a “baby step,” but more commonly, Asian and American trade experts characterize the framework as “weak tea,” consisting of “all of the things the US considers important” but little for Indo-Pacific nations in return for their membership obligations. Specifically, the US will press Indo-Pacific nations to introduce or upgrade economic and social reforms like labor rights, climate change, and data flows, among others—all while refusing to grant additional market access to the American economy.

In reality, the US has been “overshadowed” by China in recent years throughout the Indo-Pacific, particularly in Southeast Asia. As the Biden administration attempts to recover America’s leadership role in the region, the US finds itself outside of the two major regional trade agreements: the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP). While less comprehensive than the 11-member CPTPP, the 15-nation RCEP, which includes ASEAN countries plus Australia, China, Japan, New Zealand, and South Korea, includes provisions that provide meaningful inducements for intra-RCEP trade. (Almost 50 percent of exports from RCEP nations go to other RCEP members, and China ranks as the largest trade partner for almost all of them.)

The IPEF will be a complicated, not to say Rube Goldberg-esque, structure. As now envisioned (these details could continue evolving right down to the official kickoff), the IPEF will consist of four substantive pillars: infrastructure and green technology, supply chain resiliency, tax and anti-corruption, and trade rules and standards. The US Trade Representative (USTR) and Commerce Department will divide the lead responsibilities for the initiative with the Departments of Defense, State, and Agriculture participating in interagency deliberations.

Administration officials have indicated that the framework will be organized as two concentric circles. There will be an outer, less ambitious orbit of nations and an inner, more ambitious group of countries who will be expected to agree to deeper commitments. The IPEF will take the form of an executive agreement, not a trade agreement ratified by Congress. Thus, it could be subject to change by succeeding administrations.

The trade module, headed by the USTR, will include the digital economy, labor rights, environment, elements of competition and regulatory policy, agriculture, and transparency, with “inclusiveness” and reducing inequality as cross-cutting themes. At the same time, the administration has been adamant that no market access obligations will be included in the IPEF.

No final decisions have been made on just which Indo-Pacific nations will be invited to join the framework, but administration officials have held extensive discussions with Australia, India (quite recently), Indonesia, Japan, Malaysia, New Zealand, South Korea, and Vietnam. Over the past several weeks, the administration has been scrambling to persuade a number of additional Indo-Pacific nations to join the process.

The decision not to push for formal enforceable trade pacts with IPEF members has been roundly criticized by the US business community and members of Congress from both parties. At a recent Senate Finance Committee hearing, the negative reaction was bipartisan. The committee’s ranking member Sen. Mike Crapo (R-ID) queried: “Why would you take the carrot of market access off the table?” And Sen. Maria Cantwell (D-WA) stated in frustration: “I’m for labor rights. I’m for capacity building. But why can’t we be for opening market access right now and getting rid of tariffs?” These reactions echoed throughout the hearing—and at a comparable House Ways and Means Committee hearing.

Both ideological and political judgments explain the administration’s firm opposition to more formal trade obligations in the IPEF. First, starting with her confirmation hearings, USTR Katherine Tai has expressed deep skepticism regarding market-access trade goals. In recent days, she has argued that we must rethink the traditional dichotomy of “free trade equals good; protectionism equals bad.” In effect, she and other Biden administration officials accept the major claims of the progressive and labor-union wing of the Democratic party that argue past US trade agreements—or, in her words, the “offshoring and outsourcing of American jobs and opportunity”—have both been detrimental to the US and have led to greater inequality. In place of the outdated “20th century” market-access priority, the Biden administration is putting forward a new “innovative” model that privileges high labor, environmental, and social justice standards “to counteract those forces that have tended to bleed out our industries to other regions.” (Although here is not the place for this debate, it suffices to state that Tai’s progressive view of trade is inaccurate. While trade liberalization does “not lift all boats,” there is overwhelming economic evidence that freer trade policies result in greater economic growth and higher living standards.)

Tai and other administration leaders have also tied themselves in knots over the enforceable rules versus inclusive participation in the IPEF. Deputy USTR Sarah Bianchi and Commerce Secretary Gina Raimondo have stoutly claimed that binding high-stand rules will define the framework, despite the weak obligations of an executive agreement. Recently, Tai disparaged binding provisions, arguing that in the past, “what looked like ironclad commitments on paper” didn’t actually deliver. “Engagement, not dispute settlement, [is] key to durable trade policy,” she maintained.

“Engagement” through an executive agreement may have its virtues, but it is no substitute for legally binding trade rules that transcend individual US administrations. Indo-Pacific nations are quite aware of the US’ recent trade history, notably former President Donald Trump’s decision to pull the US out of Trans-Pacific Partnership negotiations. Asking Indo-Pacific nations to adhere to the most stringent labor, climate, anti-corruption, and digital trade rules while offering no market access—instead, only giving vague promises of development financing for participation in the IPEF—is no recipe for a revival of US economic leadership in Asia.

One final political point: While the Biden administration has not raised the following point as a defense of mere “engagement,” it is true that moving to a legally enforceable IPEF arrangement would entail facing the difficult challenge of seeking a grant of renewed presidential authority (Trade Promotion Authority) to negotiate future trade agreements. Such a move could well entail several years of complex domestic political negotiations. But, in the end, this admittedly fraught course might be the most realistic path for what the administration calls innovative “21st-century” trade policy.

Middle East

Iran’s oil minister paid an official visit to Venezuela, where he and Maduro spoke about ways to overcome the effects of US sanctions. ⁴⁹

Saudis feel ‘let down’ by U.S. over Houthi security threats, says senior royal ⁵⁰

Africa

Mali’s ruling junta announced it was breaking off from its defence accords with France, due to the presence of French troops and violations of its airspace. ⁵¹

In Kenya, tensions between President Kenyatta and his VP rise as the general elections near. Kenyatta asked him to resign, but he cannot remove him unless he’s impeached or is ruled physically/mentally incapable. ⁵²

UN Secretary-General urged the international community to invest equipment and money in Niger to fight jihadist insurgents linked to Al-Qaeda and ISIS. ⁵³

North America

Leaked Draft Opinion Shows Supreme Court Set to Strike Down Roe v. Wade. ⁵⁴

South America

Peruvian workers support a constitutional referendum proposal that would replace the consitution approved under Fujimori’s dictatorship ⁵⁵

The President kept a minute of silence to honor union leaders who died in their fight to enforce worker rights. “Thanks to these struggles, Peru was one of the first Latin American countries to recognize the establishment of the eight-hour working day,” he recalled.

Lopez thanked Castillo’s presence in the act stressing that no other Peruvian president had ever visited the CGTP members on the workers' day. Lopez also demanded the closing of the far-right-led Congress, which has been conspiring against the Castillo administration.

Militarily

General News

Lavrov says that May 9th is not a relevant date for Ukraine’s operations, and no event in the conflict in designed to coincide with the date. ⁵⁶

Ukrainians are getting tattoos of molotov cocktails and other symbols in order to do some kind of resistance or something. ⁵⁷

Britain promises further $375 mln in military aid for Ukraine ⁵⁸

Push To Arm Ukraine Putting Strain On U.S. Weapons Stockpile ⁵⁹

Germany will supply Ukraine with 7 Panzerhaubitze 2000 self-propelled howitzers from the stocks of the Bundeswehr ⁶⁰

Explosion at Russian factory that produces charges for air defence and Grad multiple rocket launchers ⁶¹

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The U.S. already has provided about 7,000 Javelins, including some that were delivered during the Trump administration, about one-third of its stockpile, to Ukraine, according to an analysis by Mark Cancian, a senior adviser with the Center for Strategic and International Studies international security program. The Biden administration says it has committed to sending about 5,500 to Ukraine since the Russian invasion more than two months ago.

Analysts also estimate that the United States has sent about one-quarter of its stockpile of shoulder-fired Stinger missiles to Ukraine. Raytheon Technologies CEO Greg Hayes told investors last week during a quarterly call that his company, which makes the weapons system, wouldn’t be able to ramp up production until next year due to parts shortages.

“It’s not about counting say Javelins and being able to say that when you reach a certain level then all your readiness is gone,” Kirby said. “The Javelin is an anti-armor capability, so we judge it all as a conglomerate of what’s our ability to meet this particular mission set, realizing that a Javelin isn’t the only capability you have against armor.” - John Kirby

The U.S. military effort to move weaponry to Eastern Europe for Ukraine’s fight has been Herculean. From Dover Air Base in Delaware, U.S. airmen have carried out nearly 70 missions to deliver some 7 million pounds of Javelins, Stingers, 155mm howitzers, helmets and other essentials to Eastern Europe since February. Col. Matt Husemann, commander of the 436th Airlift Wing, described the mission as a “whole of government approach that’s delivering hope.”

“It is awesome,” said Husemann, after providing AP with a recent tour of the airlift operation.
Ukrainian Deputy Prime Minister Olga Stefanishina said that Kiev “has not refused or postponed” its intention to join NATO, but according to her, Ukraine expected more from the alliance and was disappointed.

Western Ukraine

The Ministry of Internal Affairs of Transnistria confirmed the attempt of a new terrorist attack with the help of a drone stuffed with explosives. A drone with explosives was launched into Transnistria from the territory of Ukraine, the Ministry of Internal Affairs reported.

Eastern Ukraine

Kadyrov: ‘On May 2, the 2nd corps of the LPR army and Chechen fighters conducted a large-scale offensive along the entire front line, starting from the Zarya plant in the village of Yuzhny to the village of Voevodovka. As a result of the lightning attack, the enemy was knocked out of fortified positions in the Brankovsky and Severodonetsk districts and was thrown back. During the fighting, the enemy suffered losses - at least 7 pieces of equipment and more than 100 - manpower. Weapons and ammunition abandoned by the APU soldiers in a hurry were seized.’
Moon of Alabama: Ukraine’s Army Is In Very Bad Shape - More Fighting Will Only Destroy It. They largely discuss a piece from AFP. ⁶²

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As the Ukrainian troops had to walk 12 kilometers a question arises. Where are their armored carriers? Even when infantry is deployed in dugouts and trenches its transport should always be nearby (~3 km) to be able to quickly pick it up when necessary. The most likely answer is that those BTR-70, as well as the brigade’s artillery, no longer exist.

The troops walked 12 kilometers and are now on trucks. The enemy is currently 7 kilometers away. Simple math will explain that with a 5 kilometer deep gain by the Russian forces.

What a disaster. 130 conscripts up to age 40+. These ain’t well trained warriors but teachers and car mechanics or farmers drafted into the war. With 130 troops the unit has about the size of a company. Infantry companies in the Soviet/Russian/Ukrainian army are relative big:

The junior lieutenant Samoylov, who did not even finish his officer course, is leading a unit that is usually led by an officer two to three ranks higher than his. Where are the higher officers?

Each battalion of the 81st brigade should have a doctor with a more senior one serving in the brigade’s headquarter company. That a 25 year old one is in the brigade’s doctor role again points to a lack of men.

Military boots should be watertight. During my time in the military we trained in some very muddy areas but I never got my feet wet. One wonders what quality Ukrainian army boots have.

Those troops were nine weeks on the frontline and now only get one week of rest in a miserable place. Samoylov is an optimist. None of those injuries, especially not the psychological ones, will heal within a week. It takes years to overcome the cruelties of war and sometimes more than a lifetime.

The Ukrainian army is obviously in a very bad shape as it pushes barely trained conscripts to the frontline where Russian artillery will eat them up. That it is in such a state is not astonishing though. … The Ukrainian army will not win the war nor will the fascist militias. The country simply has no chance. ‘Western’ governments are abusing the Ukraine and its soldiers. They want to ‘weaken Russia’ and do not allow the Ukraine to sue for peace. That is criminal.

The Ukraine has lost the war. All the weapons systems the ‘west’ is now pushing into it are of no use as the Ukraine obviously lacks the men to field them. They will likely get pilfered and in future some of them may well be used against the ‘west’ itself.

Southern Ukraine

Russia reroutes internet traffic in occupied Ukraine to its infrastructure ⁶³

The authorities of the Odessa region in Ukraine have begun to remove satellite dishes belonging to citizens from houses. So that they can’t watch Russian TV.
Onyx missiles struck a logistics center at a military airfield near Odessa. The delivery of foreign weapons was carried out through it, the ministry said.
Powerful strikes on Azovstal.

Dipshittery and Cope

Russian Victory Day Parade Cut By 35%, Emphasizing Ukraine’s Battlefield Prowess This one is an absolute classic. Just… I don’t have hexbear emotes, but I’m chef’s-kissing right now. Get a beverage, strap in, and enjoy. ⁶⁴

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As Russia scales up anti-West rhetoric, Russia has scaled down their May 9 Victory Day Parade by almost 35 percent. The cuts are so dramatic, and the planned parade so humiliating, that Russia’s President, Vladimir Putin, will likely do almost anything to keep the World from focusing overly much upon Russia’s dwindling military prospects.

As planned, the 2022 Victory Day military parade through Red Square will be a humiliating exercise for the Russian military. The traditional parade, commemorating the surrender of Nazi Germany in World War II, has always been a place where active Russian leaders flaunted their strength and demonstrated Russia’s military prowess.

This year, Russia’s slimmed-down Victory Day Parade projects little more than military and economic weakness.

Parade guides show that only 25 Russian ground combat systems will be represented by 131 ground combat vehicles. That might sound like a lot, but, last year, Russia deployed 198 vehicles to display 35 separate systems.

The shift is marked. In 2015, after Russia annexed Crimea, Russia used the Victory Day Parade to reveal a robust suite of new and seemingly formidable Russian weaponry. But now, after failing to take Ukraine by force, Russia’s military shortcomings will be on full display, strengthening Ukrainian apatite for sustained resistance and a long war of attrition.

The shrunken parade reflects both battlefield failings and large losses. The usual large contingent of Rosgvardia forces, after being mauled in Ukraine, are absent.

Faced with confirmed losses of at least 600 tanks, Russia’s battered army now seems unable to even muster mainstream armored vehicles—staples of any Russian military parade. After losing at least 114 T-80 tanks of various flavors, Russia’s military is now apparently unable to find ten display-ready T-80 main battle tanks.

Reflecting enormous battlefield losses, the number of Russian Infantry Fighting Vehicles participating in the parade was cut by 50%. Only 3 BMP-3 Infantry Fighting Vehicles will parade through Red Square.

Artillery and multiple rocket launch systems have mostly disappeared, represented by a single class of 152 mm self-propelled howitzer and an “updated” version of the old 122mm Grad multiple rocket launcher—a battlefield system that was cutting edge back in the 1960’s.

In a sorry effort to boost the number of systems on parade, the Russians are even highlighting the lowly tank transporters employed to carry Russia’s poor-performing unmanned ground system, the Uran 9, over the parade route.

Even more interesting is that Russia seems unable to grow the number of advanced weapon systems. After revealing a number of new—and well-hyped—armored vehicles in 2015, Russia’s arms factories have evidently been unable to build parade-ground ready demonstrators.

Production seems frozen.

Russia’s new main battle tank, the T-14 Armata, made a Victory Parade debut in 2015. And, despite all the ambitious talk about how the new tank was out “in the field” and working through production kinks in Syria, Russia somehow only has three examples ready to show in the Red Square parade—the three-tank parade fleet has remained steady for three years now.

Other new systems—armored vehicles that might not be quite ready for battle but certainly should, at this point in their development, be available in sufficient numbers for parade duty—just haven’t grown. Along with the T-14 Armatas, there’s no evidence Russia has been able to build up other critical components of their next-generation armored vehicle fleet.

Next week, Russia is set to display display only three copies of the Kurganets-25 infantry fighting vehicle. First shown in the 2015 Victory Parade, production seems to have frozen. Another example from the 2015 parade, the VPK-7829 Bumerang armored car, is stuck with an unchanging inventory of 3 parade-ready platforms.

If Russia’s military parades are any guide, the Russian Army’s modernization is little more than an overhyped mirage.

Beyond simply emphasizing the strain Ukraine is placing on Russia’s army, the 2022 Victory Parade suggests that Russia’s armored vehicle production capabilities are crumbling.

The message sent by Russia’s planned military fly-over is even worse.

After losing at least 39 helicopters in Ukraine, Russia can only muster 15 helicopters for parade duty, down from 23 in 2021.

Russia’s fixed-wing aircraft are also facing serious losses over Ukraine. After loosing more than ten modern Sukhoi Su-30 and Su-34 fighter aircraft on the battlefield, none are showing up for the parade. Instead, the Victory Parade overflight seems set to celebrate Russia’s lost military glory, represented by a creaky fleet of Mikoyan Mig-29 fighter jets.

The shift in attention is stark. After relegating the “Fulcrum” to the back benches in prior parades—only 4 Mig-29s passed over Red Square in the last two Victory Day celebrations—Russia is highlighting the old Soviet-era jet in a big way.

This year, Russia is deploying an incredible 16 Mig-29s—the ‘70’s era war horse will represent more than 25 percent of the fixed-wing aircraft Russia plans to fly over Red Square on May 9.

In a sad effort to snatch back some of the glory Ukraine’s Air Force has enjoyed with its fleet of cast-off former Soviet Mig-29s, Russia is even sending the old fighters out to conduct a tawdry “Z” pattern fly-by.

Putin must know that he is set to preside over an embarrassment. The May 9 military parade only highlights Russia’s massive losses in Ukraine and emphasizes Russia’s crumbling industrial capabilities. In the air, Russia’s Air Force is resorting to celebrating an iconic Ukrainian platform that is now almost a symbol of resistance to the Putin regime.

The Russian military knows that this year’s Victory Day parade is a sad and tawdry show, and Putin, if he shows up, will have to sit though it all. It will not be a pleasant experience—and Russia’s military leaders, for their part, may well enjoy watching their boss squirm over his role in the current debacle.

To distract or deflect from his regime’s role in Russia’s military collapse, Russia’s president and his flunkies will likely lean into anti-semitic actions, apocalyptic rhetoric, or take some other controversial step. Putin, in turn, may use the embarassing parade to castigate military leaders, demanding reform. Or, instead, he may follow Joseph Stalin’s World War II example and use the evident military shortcomings to call for a full national mobilization.

The May 9 Victory Day Parade is an unavoidable moment of pageantry, putting Russia’s military and Russia’s leadership on a prominent world stage. But the big Red Square show, as it stands now, suggests that, while Russia may be celebrating a victory, things are not going Russia’s way on the current battlefield in Ukraine.

Instigating drama is about the only way the Russian regime can reduce growing awareness that both Russian and Putin’s authority is backed by a Potemkin military—an apparently over-hyped and now largely hollow force.

After that trek of an article (if you read it), we’ve got this. We could use more moral outrage over Russia God, do we really? Jesus christ… Anyway, it just reads like you’d expect, cynicism bad, Pentagon employees' fake tears over Ukrainians (after killing hundreds of thousands of Yemenis which is STILL ongoing) good, etc. ⁶⁵

US Is In Danger Of Mission Creep In Ukraine Okay, it does the “Putler’s army is failing, he’s incompetent, heavy losses” thing, which is now the “China has faced international criticism for their treatment of the Uighyrs, which some say constitutes a genocide” of Russia in that it has to be mandatorily mentioned in every article with the word “Russia” in it, but then… ⁶⁶

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It matters greatly how Ukraine, Russia, and NATO define winning and losing. Many armchair strategists in the United States who advocated ambitious wars in Afghanistan and Iraq now call for Putin to lose decisively. The U.S. Secretary of Defense Lloyd Austin seemed to join them by stating, “We want to see Russia weakened to the degree it can’t do the kinds of things it’s done in Ukraine.” The goal of decisive victory goes far beyond what U.S. and NATO leaders advocated at the onset of this war.

Mission creep happens. The initial purpose of the U.S. war in Afghanistan was to rout Al Qaeda. The initial purpose of the second U.S. war against Iraq was to topple Saddam Hussein. Both missions were accomplished early on. Then the George W. Bush administration changed the goal posts in both wars, in part because “winning” could be short lived without systemic change. Both wars morphed into something more grandiose and utterly unachievable — the transformation of Afghanistan and Iraq into friendly, governable, democratic states.

Mission creep can also cause much sorrow in the war between Ukraine and Russia. Stopping Putin from succeeding in Ukraine is quite different from crippling his military’s ability to wage aggressive war. There’s no need for an ambitious war aim: Stopping Putin from succeeding in Ukraine is, by itself, the functional equivalent of preventing him from making the same mistake twice.

It’s OK for Putin to claim a win in Ukraine that’s an obvious loss. It’s not OK for him to achieve important territorial gains in the east and in the south. What constitutes “important” territorial gains is for Ukraine’s leadership to decide, just as it is Kiev’s decision to assess the level of sacrifice required to deny and reverse Russian gains.

One reasonable definition of loss is that whatever Putin gains from waging aggressive war pales in comparison to Russian losses. These calculations include territory, but extend well beyond where the forward edge of battle congeals.

The pursuit of a decisive win by Ukraine and Putin’s decisive loss would constitute another example of mission creep. Two of the likely consequences of mission creep would be great strains within NATO and greater desperation by Putin.

It’s as essential to prevent the use of a nuclear weapon in this war as it is to deny Putin the functional equivalent of a victory. A mushroom cloud would have profoundly negative consequences for participants and onlookers in this war. Nuclear use would not only be a Hitlerian act; it would also seriously increase nuclear dangers on many fronts.

The odds against battlefield use remain high, but they are reduced the more government officials and armchair strategists advocate mission creep.

It’s necessary for Putin to lose more than he gains in this war. It’s also necessary to avoid mission creep. Its advocates have a terrible track record.

Why Europe will have to face the true cost of being in debt to China ⁶⁷

Billions of dollars of Chinese money are boosting some European economies - but some of the deals being struck have a catch. Critics say they are “debt traps”, where China gets to choose what happens if loans aren’t repaid. China insists it is a reliable investment partner - but it is also facing allegations of worker exploitation and environmental damage.

The British believe that the Russian military is now significantly weaker after its losses in Ukraine. ⁶⁸

Relatedly, some western officials believe that Putin may formally declare war on Ukraine on May 9th, “as invasion efforts continue to falter”. I do wonder if the point of this speculation is to drive up expectations that these “experts” know will not be fulfilled, in order to… make Putin seem out of touch, or incompetent? idk, maybe I’m giving them too much credit - maybe they are just that stupid. ⁶⁹

UK: Russia’s Most Elite Military Units Will Be Weakened for Years ⁷⁰

The UK says that this is Ukraine’s “finest hour” as it boosts military aid. ⁷¹

Tapped Calls Expose Russia’s Heinous Treatment of Own Dead Troops ⁷²

Russian authorities are transporting the dead bodies of Russia’s fallen soldiers from Ukraine back to Russia in “small batches” in the dead of night in an attempt to conceal just how many Russian troops are dying in Ukraine, according to intelligence shared by the Security Service of Ukraine (SBU).

Isn’t… isn’t that what you’re meant to do? Recover your wounded and dead rather than leave them scattered everywhere? And obviously you’d move them at night, when it’s safer to do so?

What the Kremlin’s rubles-for-gas threat is about ⁷³

This article is actually a decent summary of the situation, but calling it a “threat” is pretty hilarious. And also insinuating that the sanctions are as natural and timeless as gravity, as if the world came into existence on February 24th, and couldn’t just be removed if necessary, is some real dipshittery.

To everybody here who’s in poverty and the future’s got you worried, I have some good news: 3 reasons Americans are actually doing OK in the face of inflation, according to an economist ⁷⁴ and also 4 reasons why the US could be past peak inflation ⁷⁵

The latest in criticizing China for not letting a disease run free that affects almost every organ in your body and is one of the most contagious viruses known to man. This one is a little gentler than most western critiques, though. Zero-Covid at all costs is exposing the flaws in China’s top-down approach ⁷⁶

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With President Xi Jinping focused on maintaining stability as he seeks to secure an unprecedented third term this autumn, China has remained steadfast to zero-Covid policy adherence.

Authorities moved quickly to contain an outbreak in Beijing after Covid-19 cases rose over the weekend, having seen the effects of a delayed response in Shanghai. From Thursday, the end of a five-day Labour Day holiday, residents will have to provide proof of a negative PCR test result taken in the last seven days to use public transport and enter office buildings, entertainment venues and sports facilities.

Still, there are other elements of China’s policy implementation that should provide lessons for the future – and will create challenges for Xi in the present.

First, the inflexibility of Covid-19 policy implementation at a local level has narrowed the central authority’s breadth of governance.

Although the Shanghai government assured residents of its efforts to minimise the impact of the pandemic on the economy and society, and that medical and basic living demands would be met, the gap left by food supply disruptions and inadequate government support has been filled by bulk-buying and bartering.

People with serious diseases have been denied timely and often life-saving hospital treatment due to strict Covid-19 testing rules. Taking policy implementation to such extreme lengths can hardly guarantee minimal economic and social impact. Indeed, fears of food shortages like those in Shanghai have given rise to panic buying in Beijing.

A change in approach only came after a backlash from the public, with the Shanghai government stressing that hospitals should not use anti-epidemic measures as an excuse to deny patients emergency treatment.

Second, government policy has shifted priority, from livelihood issues to ideology. Although Xi has repeatedly stressed the importance of a “people-first” approach, food shortages and inaccessibility to emergency care are proof of a gap between party will and action.

While many internet users have pondered on Weibo whether the zero-Covid policy is more frightening than the virus itself, such narratives have been blocked by authorities and replaced by state media stories of frontline workers combating the pandemic.

China’s construction of positive ideology over practical solutions is contradictory to the government’s principle of basing top-level policy and discourse on material needs.

Third, the central government’s need for stability has created an imbalance between policy objectives and outcome. Faced with the uncertainty of what might happen should pandemic rules be relaxed, it is sticking with what it sees as the option with the least number of variables.

Beijing remain resolute about a stable continuation of power, and this requires the elimination of Covid-19. As such, the desire for stability outweighs and limits the comprehensiveness and flexibility of any policy that might be implemented.

While fear of the unknown made the public willing to tolerate strict measures at the start of the pandemic, they now have a much greater awareness of the virus.

Moreover, after two years of disruptions to daily life, they have a much lower tolerance for the government’s rigid pandemic response. Such sentiment is reflected in the outpourings online that even internet censors cannot completely eliminate.

The conflict between grass-roots citizens and government is intensified by the fact that material needs are not being met.

Thus, the contradiction between ideology and reality is inescapable: Xi has repeatedly declared that “the people are the real heroes”, yet the focus on consistency, both in power and policy, has undermined this assertion.

The impact of zero-Covid on the economy has also forced China to gradually change its strategy. The national per capita income growth rate, as reported by the National Bureau of Statistics, is a reflection of the impact of pandemic measures on people’s livelihood.

While growth hit 13.7 per cent in the first quarter of 2021, it fell to 5.1 per cent in the first quarter of 2022, as the economic fallout of citywide lockdowns spilled over into supply chains and the labour market.

This economic pressure has pushed the government to adapt its pandemic narrative, to focus more on early mass testing, rather than local lockdowns.

Even so, the battle for zero-Covid is a classic example of how policy can fail in an top-down authoritarianism system. When policy is conveyed down from the central government to local authorities, there is inevitably a narrowing of understanding and implementation once it reaches the grass-roots level, because the pressure from the top prevents local administrations from making free decisions. The result is visible in people’s quality of life.

As scholars Jiajian Chen and Qiongwen Zhang, from the Southwestern University of Finance and Economics, note, “the tremendous pressure for implementation will stimulate the grass-roots government to employ extraordinary methods to achieve the policy objectives in the form of campaign-style implementation”.

The drastic lockdown measures we have seen in Shanghai thus reflect the inescapable link between rigid policy implementation and public sacrifice.

While the limits on political expression mean it is unlikely that public discontent will result in protests, the glaring imbalance between efforts to improve quality of life and promote central government ideology and political objectives make it imperative for Xi to solidify his legitimacy once more at this vital time.

Climate

China-reliant Gabon finds oil-free, green future in its forests. Gabon currently gets 60% of its revenues from oil and manganese ore, but is shifting to focussing on forestry, hoping to create a balance between conservation and sustainable development. ⁷⁷

Texas’ Wildfire Risks, Amplified by Climate Change, Are Second Only to California’s ⁷⁸

I Thought I’d Mention

Trump’s border wall has resulted in ‘unprecedented’ increase in migrant injuries and death ⁷⁹

Two Michael Roberts (thenextrecession) pieces in quick succession!
It’s not looking good for 2022 ⁸⁰ and A Marshall plan for Ukraine? ⁸¹