A sideways glance at Ukraine war news

Musk's satellites, an unorthodox Christmas, Yandex and much more.

Chris Johns

I write a (short) daily post for Powerscourt, a Strategic Communications company, based in London and Dublin. The idea is to summarise the news flow around the war in Ukraine - not so much the news that makes the front pages but more the stuff that we find interesting/relevant. News that may have not attracted the attention it deserves. Anyone interested in receiving the short email on a daily basis is welcome to contact Powerscourt here: insights@powerscourt-group.com

Each Friday I will post the weeks ‘diary’ here. All feedback/comments welcome.

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Monday 7th November

Elon Musk’s expensive purchase of Twitter has been accompanied by questions over his commitment to Starlink, his network of thousands of small satellites. CNN today reports an outage of 1,300 terminals linked to the satellites, that, amongst other things, allow Ukraine’s military to maintain communications at a time when domestic networks are being destroyed by Iranian-manufactured Russian drones. Sources tell CNN that Starlink has written to the Pentagon, muttering about losses of $100 million in the effort to keep Ukrainian soldiers talking to each other. Musk himself has Tweeted that ‘he will keep funding the Ukrainian government for free’. Ukraine was reported to be paying SpaceX a token $2500 per month connectivity charges but by late summer had stopped handing over even that.

At the same time, the Pentagon is said to be fully aware that it is going to end up footing the bill, with negotiations focused on the amount rather than on who pays. Elon Musk will probably be grateful for anything, as speculation swirls that his $43 billion Twitter investment is heading towards zero. Plenty of prominent Twitter users are discovering the joys of alternative sites such as Mastodon, whose servers can barely cope with sudden surge in traffic.

Joe Biden has announced a further $400 million in military aid, including cash for a joint project with the Dutch for a refurbishment of T-72 tanks, bringing total US transfers to Ukraine of around $8 billion. It will all get a lot harder if the Republicans prevail in the Congressional mid-term elections. 

As Ukraine gets better at shooting down Iranian drones, North Korea is also said to be supplying Russia with military hardware. Bloomberg reports satellite images of the first train in years crossing on Friday from North Korea into Russia. While nobody knows what was on the train, the US has publicly accused Pyongyang of supply artillery shells to Putin, something the North Koreans have denied. 

Tuesday 8th November

Christmas will come earlier than usual for members of Ukraine’s Orthodox Christian church. In an effort to move away from its Russian counterpart, the church told Ukrainians yesterday that they could celebrate on 25th December instead of the usual 7th January.

The UK’s ministry of defence said today that there is increasing evidence of defensive fortifications appearing just behind the Russian front lines in eastern Ukraine. Factories making concrete ‘Dragon’s Teeth’ blocks have been opened up near Mariupol, the key city on the route to Crimea. Part of that defensive effort appears to be Russian soldiers adopting civilian clothes in Kherson city, in a curious attempt to convince Ukrainians to attack an apparently undefended target. One or two Ukrainians have speculated that it could even be a trap. 

The MoD also suggested the Russian airforce has lost 278 aircraft, twice its losses in the war in Afghanistan. One of the great mysteries of the war, and another expert prediction that turned out to be wrong, is the absence of Russian air superiority. Airforces the world over are pondering their futures. Apparently, they can be easily be shot out of the sky with hand-held weapons.

Russian boasts about interference in today’s US mid-term elections will have surprised nobody. Prediction markets confirm those Russian hackers have done a good job: a clear Republican victory in both houses is the confident forecast. On the other hand, correlation isn’t necessarily causation.

All of a sudden there are lots of talks about talks not taking place. Moscow says it is prepared to talk but it’s Ukraine’s fault that nobody is at the table. US media is full of reports about US peace talks with Russia that apparently are all about anything other than peace talks. All very confusing. But this is either a forever war, somebody wins or talks bring about an end.

Wednesday 9th November

Yesterday’s daily reminder that the war in Ukraine has consequences everywhere, often in unexpected places, came from the world of bitcoin. A blow-up in an obscure crypto exchange, ostensibly driven by a row between two rich guys, is at least as much about higher interest rates. Borrowing costs are rising because central banks are responding to inflation, itself mostly on the up because of the war and its effects on energy and food prices. 

Where there is too much leverage, too much borrowing, there are problems. The recent blow-up in the unimaginably boring world of UK liability driven pension investing was caused by higher interest rates and led to the resignation of a prime minister. Too much leverage in the crypto world has contributed to Bitcoin now underperforming the US stock market for the last 5 years, something that was not in the original prospectus.

Market insiders are asking, ‘where is the next debt/liquidity bomb going to go off?’ Who has behaved (invested) as if interest rates could never go up again? Everyone has their favourite candidates with lots of whispers about Private Equity - a sector where leverage is the raison d’être. The next accident is more likely to come from where we least expect.

The Ukrainian government yesterday again insisted that peace talks are not taking place while at the same time staking out their initial negotiating stance. The US confirmed that talks are taking place but they aren’t really negotiations. Not yet, anyway.

India’s foreign minister, Subrahmanyam Jaishankar, turned up in Moscow yesterday and confirmed that India will remain a big buyer of Russian oil. “Russia has been a steady and time-tested partner. Any objective evaluation of our relationship over many decades would confirm that it has actually served both our countries very, very well,” Jaishankar said in a joint news conference with Sergei Lavrov, his Russian counterpart. 

Hopes for future peace talks often mention India (and Turkey) as potential brokers.

Thursday 10th November

Will Vladimir Putin attend the upcoming G20 summit in Indonesia and come face to face with Joe Biden? Indonesia says no, but the Russian state news agency, RIA, says he will put in a remote appearance. Putin’s absence was noticeable at the high profile media event that saw his Defence Minister and top general announce a retreat from Kherson city. The Economist is one of many outlets raising the question today, is it a trap? Without elaboration, Turkish President Tayyip Erdogan today said the retreat from Kherson is a ‘positive step’. His slightly gnomic statement was in response to a question about the prospect for peace talks. In the Telegraph today it is suggested that the real winner in the war will turn out to be Turkey.

Russian newspapers this morning are calling it anything but a retreat - it’s the ‘Kherson manoeuvre’ and Vladimir Putin’s name is nowhere to be seen in any of the reports about yesterday’s announcements. 

Joe Biden noted that the Russians waited for the US mid-term elections to be over before announcing the retreat - a ‘retrograde under contact’ in military jargon. Russian state TV has been full of pundits saying exactly the same thing. Many have expressed disappointment that ‘their guy’ has not emerged well out of the preliminary election results. For the avoidance of doubt, they are referring to Donald Trump.

The Daily Beast’s Julia Davis provides us with regular transcripts of nightly Russian political chat shows. She describes top propagandist Vladimir Solovyov as ‘Russia’s Tucker Carlson’, a reference to Fox News’ top Putin admirer. Solovyov greeted the US elections with “Happy Interference in the U.S. Election Day”. His show last night began with expressions of disappointment about two key events. “We’ve been planning an entirely different program tonight. We were going to talk about American elections, but then we got the news from Kherson.”

The US military’s top general says the war has claimed around 200,000 casualties, evenly split between Russia and Ukrainian forces. The Pentagon also thinks Russia has lost half its tanks in Ukraine.

Friday 11th November

Bitcoin isn’t the only thing whose price is crashing. European natural has prices are down almost 10% this morning, with the December contract hovering just above €100 per megawatt hour. It was €350 as recently as 26th August. Prices are still more than double where they were a year ago but the almost daily falls in prices since the summer run counter to many forecasts made in the wake of Putin’s shutting of the pipelines. Warmer weather helps of course but equally important has been a collapse in gas consumption as purchasers have economised and switched to alternative sources of energy. Consumers have yet to see an improvement in retail prices but have, at the moment at least, something to look forward to.

European central bankers will also be living in hope and that EU inflation will, helped by lower energy prices, soon track its US counterpart and deliver some good news. Better inflation numbers yesterday triggered the best day in US stock markets in 2 1/2 years.

Yandex is Russia’s popular alternative to Google. The BBC reports today that in the first six months of the war nearly 7000 websites were blocked by the Kremlin. But no suppression of Yandex, which handles 60% of Russian web searches. Put in the search term ‘Bucha’ and nothing about Russian atrocities will be returned. Top search results include anonymous blog posts that say the killings in Bucha has nothing to to do with Russian troops - or that they never took place. Deaths in Lynan are blamed on Ukrainian ‘Nazis’.

CNN reports that hackers linked to Russia’s armed forces were behind a recent spate of ransomware attacks on Ukrainian and Polish transport and logistics businesses. Microsoft said Thursday ‘the hacks did cause some damage’ but the full extent of the harm remains unclear. Microsoft also said that Russia’s GRU (the modern KGB) was behind the attacks. We should be mindful that if confirmed, these attacks are on Poland, a member of NATO. The boss of NATO, Jens Stoltenberg, is quoted by CNN saying that a cyberattack ‘could trigger NATO’s collective defence clause’.