Putin's propaganda

Delivered on By Justin Pyvis

Good morning! According to ScoMo, the “rather significant weather system” that has so far killed 10 people and led to 80,000 claims for disaster support in Queensland and northern NSW – Brisbane notched up 80% of its annual rainfall in 3 days – is set to continue “moving down the east coast of Australia”, reaching southern NSW today. Flood warnings were issued throughout the state.

La Niña has been particularly bad this year, although it is past its peak and conditions are expected to return to normal by mid-Autumn. In the meantime, stay safe. 🙏


Reading the tea leaves

Daily % change

AUD/USD

72.5

+0.8%

AUD/CNY

4.58

0.0%

AU Bond

2.07

-5.2%

US Bond

1.71

-7.2%

ASX200

7,097

+0.7%

S&P500

4,303

-1.6%

Brent (bbl)

105.5

+4.5%

Gold (oz)

1,942

+2.2%

Iron ore (t)

147.6

+4.0%

Bitcoin

43,888

+1.6%

Ethereum

2,962

+1.5%

Note: Brent oil, gold bullion and iron ore prices are the second futures contract. Bond yields are 10-year Treasuries. The S&P500 is a snapshot 30 minutes before close.

At the time of writing the US S&P500 was down -1.87% with every sector except energy (+0.9%) in the red. The falls were again led by the financials sector (-3.6%) as bond yields fall and fears grew of spillovers from Russian sanctions. Yesterday Citi revealed it had more than $US10 billion in exposure to Russia.

Locally, the ASX200 (+0.67%) gained ground for a second straight day with only the utilities sector (-2.2%) suffering significant losses. The big mover in the right direction was tech (+5.7%) thanks largely to Block (+12.8%), which mirrored its gains in the US from the night before after being upgraded by BMO Capital Markets.

It was another great day for crypto, which for the first time in a long time is moving in the opposite direction of US stocks, rallying amid sanctions on Russia’s banks.


Food for thought

Russia's President Vladimir Putin appears to want, at a minimum, to 'restore' Russian territory to its pre-WW2 state, which includes the modern-day Ukraine to the east of Kyiv.
Russia's President Vladimir Putin appears to want, at a minimum, to 'restore' Russian territory to its pre-WW2 state, which includes the modern-day Ukraine to the east of Kyiv. Source

Russia’s state-owned news outlet, RIA Novosti, mistakenly published an article called “The resolution of the Ukraine question” on 26 February, before promptly deleting it.

Fortunately the internet never forgets and a twitter user translated it to English, offering an insight into some of the propaganda President Vladimir Putin was ready to sell to his people after “Ukraine has returned to Russia”:

“Russia is restoring its unity - the tragedy of 1991 [Ukraine’s founding], this terrible catastrophe in our history, its unnatural dislocation, has been overcome. Yes, at a great cost…

But there will be no more Ukraine as anti-Russia. Russia is restoring its historical fullness, collecting the Russian world, the Russian people together - in its entirety of Great Russians, Belarusians and Little Russians…”

As to why Putin thought he had to act now:

“Vladimir Putin has assumed, without a drop of exaggeration, a historic responsibility by deciding not to leave the solution of the Ukrainian question to future generations…

Returning Ukraine, that is, turning it back to Russia, would be more and more difficult with every decade - recoding, de-Russification of Russians and inciting Ukrainian Little Russians against Russians would gain momentum.”

Then there’s the future envisioned by the author, including how Russia’s relations with the West will be forever changed:

“In any case, the period of the split of the Russian people is coming to an end. And here begins the second dimension of the coming new era - it concerns Russia’s relations with the West…

These relations have entered a new stage - the West sees the return of Russia to its historical borders in Europe. And it is loudly indignant at this, although in the depths of his soul he must admit to himself that it could not be otherwise… Did anyone in the old European capitals, in Paris and Berlin, seriously believe that Moscow would give up Kyiv? That the Russians will forever be a divided people?”

The author appears to have underestimated both the desire of Ukrainians to remain independent and the West’s willingness to respond to an invasion, claiming that the West is full of “geopolitical fools” who “did not have the strength to keep Ukraine in its sphere of influence”.

The piece wraps up by celebrating that a “multipolar world has finally become a reality… this is Russia’s return of its historical space and its place in the world”, and that:

“Russia has not only challenged the West, it has shown that the era of Western global domination can be considered completely and finally over.”

The propaganda will probably need to be tweaked as the Russian invasion enters its 6th day, well beyond the short, decisive victory Putin was likely targeting. But even on that front Putin appears to be failing, having “totally overestimated its ability to win a propaganda war”, as he gradually loses control of “the state’s narratives of identity”.

With any luck, the Ukrainian resistance and far stronger than expected pushback from the West (Germany’s big swing is testament to that) will eventually force a rethink, if not by Putin himself then from those who might wish to replace him with someone less aggressively unhinged.


Chewing the fat


Bits and bytes

🤒 ScoMo tested positive for COVID-19 “after developing a fever”.

🕚 The Reserve Bank of Australia left its cash rate unchanged at 0.1%, declaring that: “While inflation has picked up, it is too early to conclude that it is sustainably within the target range.”

🏡 According to CoreLogic, Australian house prices increased 0.6% in February, the 17th consecutive monthly rise. However, “Sydney and Melbourne have shown the sharpest slowdown, with Sydney (-0.1%) posting the first decline in housing values since September 2020, while Melbourne housing values (0.0%) were unchanged.”

⚔️ Australia’s government “will send around $A70 million to fund military equipment, including ammunition and missiles, and other support to Ukraine to help its fight against Russia”.

🚗 He must be on the mend from his bout of COVID? Billionaire Clive Palmer “has reportedly purchased Adolf Hitler’s bulletproof Mercedes-Benz… off an unnamed Russian billionaire”.

📵 Two severed cables left Tasmania with a “major state-wide internet outage” yesterday, taking out the NBN along with 4G data, TV stations and some phone networks.

👎 The Victorian government’s plan to tax developers building higher-density (i.e. affordable) housing to fund its social housing programme is “off the table for good”, just 10 days after being announced.

🍁 Canada’s government banned all imports of crude oil (~$US550m per year) from Russia and will send Ukraine anti-tank weaponry.

🛢️ Shell “will exit its joint ventures with Russian gas giant Gazprom and related energy entities”, believed to be worth around $US3 billion.

🏦 The European Central Bank warned that the European arm of Sberbank, Russia’s biggest lender, is set to collapse after “significant deposit outflows” linked to “geopolitical tensions”.

💳 Mastercard “blocked multiple financial institutions from its payment network as a result of sanctions imposed on Russia over Moscow’s invasion of Ukraine”.

🏉 World Rugby suspended Russia and Belarus “from all international rugby and cross-border club rugby activities until further notice”.

❌ Turkey closed off the Bosphorus and Dardanelles straits to warships from any country as per the Montreux Convention of 1936, limiting Russia’s ability to reinforce its Black Sea fleet.

📡 Elon Musk’s delivery of Starlink satellites made it to Ukraine, at least according to a photo posted by vice PM Mykhailo Fedorov.

💶 The Ukrainian government is issuing war bonds to finance “the needs of the Armed Forces of Ukraine”, with the rate of interest to “be determined at auction”.

🏭 The Caixin China purchasing managers index (PMI) increased to 50.4 in February from 49.1 in January, indicating an expansion in activity (the 50 mark separates expansion/contraction). The official PMI rose to 50.2 in February from 50.1 in January, its fourth straight month of expansion.

🦠 “Hong Kong’s government is being forced to move away from key pillars of its strict Covid Zero strategy as a surge in new cases overwhelms the under-prepared health-care system.”

🗳️ Yes, because corporations only became greedy in the past 12 months: a US survey found that 63% of voters believe that “large corporations are taking advantage of the pandemic to raise prices unfairly on consumers and increase profits”.

✈️ The teenager who was tracking Elon Musk’s flights “has started tracking the whereabouts of some of Russia’s wealthiest businessmen, posting when and where their aircraft takes off and lands”. Here’s the twitter account.

💉 A new pre-print study found that the Pfizer vaccine’s efficacy against infection among children aged 5-11 (who receive a smaller dose) fell to just 12% after around a month. Its effectiveness against hospitalisation fell to 48% from 100% over the same period.