Crisis in the Ukraine

Equation said:

Well they better hurry up before NATO and the US are coming in either by air support or weapons supply drops to the Ukraine forces stuck in those pockets. Russia and US spy satellites are watching this event very closely.

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pla101prc said:

it is extremely unlikely that obama will do that, judging by his approach in syria and libya. and if the US doesnt do anything, then europe wont make a move either.

needless to say, it is also extremely unwise for the US to get directly involved

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Washington is going ahead with a planned military drill in Western Ukraine just hours after Russian president Vladimir Putin was able to convince pro-Russia separatists to stand down in their fight with the Ukrainian military in the eastern oblasts of Donetsk and Luhansk. This military drill does not bode well for Friday’s cease-fire discussion in Minsk, Belarus between the Ukrainian government and the separatist leaders who will demand autonomy from Kiev.

According to a Reuters report on Tuesday, preparations are under way for a joint military exercise this month with more than 1,000 troops from the United States and its allies shipping into Ukraine for the roughly three year old Rapid Trident program, part of Ukraine’s military tilt towards NATO.

The decision to go ahead with the Rapid Trident exercise Sept. 16-26 is seen as a sign of the commitment of NATO states to support non-NATO member Ukraine. The annual exercise was initially scheduled for July, but was pushed back due to the ongoing crisis in the east.

Ukraine’s military has been battling with separatist groups in cities close to the Russian border, where nearly half of the population are ethnic Russians. The exchange of fire power between both sides has been on going since March.

The political tug of war has one side wanting greater autonomy from Kiev — which means closer ties to Moscow — and the other side wanting to maintain territorial integrity, with Kiev the indisputable power source of the Ukrainian government.

Looked at another way, Kiev wants Donetsk and Luhansk to become autonomous republics about as much as Moscow wants Ukraine to join NATO.

Of course, Ukraine is no stranger to NATO, much to Russia’s chagrin. Russia sees itself as the true power behind the throne in Ukraine, an old bread basket state and military base for Russia for centuries.

Ukraine contributes to NATO’s missions in Afghanistan and Kosovo. The formal basis for NATO-Ukraine relations is the 1997 Charter on a Distinctive Partnership, which established the NATO-Ukraine Commission, and the Declaration to Complement the Charter, signed in 2009. Rapid Trident was launched shortly after with the U.S. Army taking the lead.

On Wednesday, just hours after Putin managed to convince pro-Russia separatists to cease fire, President Obama said in Estonia ahead of the upcoming NATO Summit that the U.S. and NATO would not allow a foreign country to encroach on its friends. He said this after blaming Moscow for the political turmoil in Ukraine. He was a hair away from saying that the U.S. would protect Ukraine from a Russian military attack.

On balance, it appears Russia has done its part in orchestrating the slow Balkanization of the country.

On March 17, it annexed the Crimean peninsula, then an autonomous region in the Black Sea. The Crimean government, made up of mostly ethnic Russians, held a referendum for secession when Kiev voted to eliminate the Russian language from official, government communications.

The Russian economy has been sanctioned by both the U.S. and Europe ever since.

This likely led to economic contraction in the third quarter and possibly a recession, said Jan Dehn, an emerging markets economist for the Ashmore Group in London.

Markets in Russia actually rose today thanks to the cease fire, but all eyes will be on the Friday meeting in Minsk between the two warring parties.

Even though the U.S. has been planning the Rapid Trident exercise since the summer, carrying this out now is akin to “showing the flag”, a Naval practice often used to flex military muscle and show political influence.

Russia may see this as more mammalian, with NATO nations led by the U.S., marking its territory at a fragile time in Ukraine-Russia relations.

For his part, Putin has raised the white flag, which isn’t to say his side is losing. In response, the Ukrainian government issued what the Associated Press referred to as a “vague statement” on agreeing with Putin to end the conflict. The separatists initially rejected the move, saying no cease-fire was possible without a pullback by Ukraine’s military. This makes Friday’s meeting a must-watch for Russia investors. Political risk is driving Russia’s equity market right now, making it a high volume trade for day traders with an appetite for risk.

But investors in general will all be impacted if Friday’s meet ends in a stalemate, or ends the cease-fire altogether.

Early today, safe haven assets dropped in price and bond yields for German, U.S. and U.K. debt all rose on the cease-fire news. Markets are watching Russia closely.

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Equation said:

(Cough).....(cough)....you were saying?

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Dannhill said:

Putin is outplaying all European heads of state because they relinquish their rights to formulate policies good for their own country in favour of being a US tool against their better judgement.

Putin makes Obama looks like a child in a toy store where it comes to real politiks. Obama, as with all US Presidents in the last 50 years only has the Hammer to solve all problems. They do it because they can get away with it. Not because they should. Hence, the mess the world is in today.

My respect for Putin went up notches since this civil war started.

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