War Games And Vaccine Agitprop

Some market participants may be concerned, but it isn’t likely that new containment measures tied to COVID will induce a serious pullback in equities.

That’s according to JPMorgan’s Mislav Matejka. The bank’s target for European shares is unchanged amid more aggressive efforts to halt the virus’s latest advance, including Austria’s national lockdown and vaccine mandate. The latest wave “is unlikely to be a material, or sustained, problem,” Matejka said.

That, despite worsening protests against various protocols aimed at curtailing the spread or, put differently, citizens taking to the streets to assert their right to get sick and die rather than roll the dice on a low-risk, highly effective vaccine proven to drastically reduce the odds of serious illness and death.

Over the weekend, Twitter’s algo decided to surface a tweet in my feed from an analyst I don’t follow, presumably because the person has a fairly large fanbase in the “FinTwit” (i.e., finance-focused Twitter) community. Apparently, the platform’s AI thought I might be interested.

This arrogant chap (a late twentysomething or early thirtysomething) owes his popularity in part to barely-veiled agitprop and the kind of unimaginative jokes I bemoaned here on Sunday. He’s also blissfully oblivious to the distinct possibility that people only cite his charts and analysis because both are available to the public for free. The tweet was classic counternarrative: Although he’s been vaccinated and personally thinks vaccinations are a good idea, he thinks it’s abhorrent that governments would mandate vaccines.

In my opinion, the intent behind such tweets is to raise the temperature (i.e., “See, even vaccinated people with verified social media accounts and tens of thousands of followers oppose mandates!”) and also to garner retweets and likes. In today’s world, even those who’ve been adults for a decade (or more) need positive affirmation in the form of strangers clicking a small heart icon.

It’s unfortunate that educated people still engage in that sort of behavior, and it speaks to why social media is psychologically deleterious.

Speaking of counternarrative and propaganda, the Kremlin on Monday pushed back on reports that Vladimir Putin may be poised to launch an offensive in Ukraine. Dmitry Peskov called reports of an imminent Russian invasion a “targeted information campaign,” designed to stoke tensions. To be fair, he should know. Peskov and Maria Zakharova are the world’s foremost authorities on “targeted information campaigns” aimed at sowing confusion.

According to Peskov, it’s Ukraine that’s the problem. The government in Kyiv might be plotting to seize territory held by Russian-backed separatists and is increasingly prone to “provocations… using weapons delivered by NATO.” The Russian military, by contrast, is just conducting the “usual background level” of “routine scheduled and unscheduled military maneuvers.” (If you believe that…)

Bloomberg reported over the weekend that the US shared intelligence with allies in Europe depicting a buildup of Russian forces and artillery which could be deployed in “a rapid, large-scale push into Ukraine from multiple locations if Putin decided to invade.” Multiple media outlets detailed similar movements late last week.

“American intelligence officials are warning allies that there is a short window of time to prevent Russia from taking military action in Ukraine, pushing European countries to work with the US to develop a package of economic and military measures to deter Moscow,” The New York Times said. Apparently, the Pentagon “is not assuming” Putin is bluffing.

“Russian social media is again sharing pictures of a rump Ukraine sandwiched between the pincers of Belarus and ‘New Russia’ stretching all along the key grain ports of the Sea of Azov and the Black Sea as far Moldova,” Rabobank’s Michael Every wrote Monday. “We can only wait and see while stressing what this would mean for food and energy prices — and for the international order.”

The ruble dropped to the weakest since August (figure above).

I’d gently state the obvious. Russia calculates based on what Putin believes he can get away with without provoking debilitating sanctions. The idea of an outright military confrontation with NATO is obviously preposterous. If Moscow goes on a military adventure, it’s because the Kremlin decided Washington wouldn’t engage directly or, in the case of Syria, would find enough common cause (i.e., eliminating various Sunni extremist elements) to politely allow Russia to operate, even if its overall objective (i.e., restoring Bashar al-Assad) is decidedly suboptimal.

I suppose the only thing I’d add is that considering who was in charge during the Crimea debacle, and taking account of how poorly the Afghanistan exit was managed, the optics for Joe Biden of allowing Russia to invade Ukraine unchallenged would be… well, decidedly suboptimal.