Ukraine invasion - effect on FTSE?
Discussion
There is another thread in NPE on the politics of it but just with regard to share prices in the UK, will we see a big sell-off? It appears the drum-beats to war are getting louder so thought it worth some speculation.
I'm thinking it depends on the style of attack by Russia from the mild (Cyber attack) to the wild (full land invasion with Kiev as the target). So, my two peneth:
Cyber attack or other mild confilct - no appreciable effect
Small invasion to create land corridor between the Donbass and Crimea - 2-5% selloff
Full invasion from Russia and Belarus - 10-20% losses
Or could it be worse than that? I'm not going into nightmare NATO forced to use nukes scenario, just the more likely ones.
What are your thoughts?
I'm thinking it depends on the style of attack by Russia from the mild (Cyber attack) to the wild (full land invasion with Kiev as the target). So, my two peneth:
Cyber attack or other mild confilct - no appreciable effect
Small invasion to create land corridor between the Donbass and Crimea - 2-5% selloff
Full invasion from Russia and Belarus - 10-20% losses
Or could it be worse than that? I'm not going into nightmare NATO forced to use nukes scenario, just the more likely ones.
What are your thoughts?
On the plus side, nukes might (perhaps, just) knock the No.10 drinks party off the headlines, which according to our dear media has been THE most important thing in the whole world for the last fortnight.
Wait for: 'Labour claim Boris set up Russian invasion to deflect attention from No.10 drinks party...'
Wait for: 'Labour claim Boris set up Russian invasion to deflect attention from No.10 drinks party...'
It's hard to say. A decade ago Russia was Ukraines largest trade partner accounting for 30% but today its the EU at 40%. This is what is causing the friction, EU expansionism into ex Soviet land annexing more and more trade partners from Russia and being ever more provocative.
The Russians are effectively drawing a line in the sand against EU expansion. Russia only has two deep water ports accessing the Med, one is in Syria, hence their involvement there to keep the US and EU from blocking that and the other is Crimea, hence why they annexed it a few years ago.
Whether Russia wants the Ukraine back under its ownership or is just halting Teutonic expansion by using its military which it knows only the US element of NATO could stand up to and has zero interest in getting drawn into a problem caused solely by Germany and Brussels is debatable.
How it potentially impacts on the FTSE is hard to say. We do t ship much goods through Ukraine, Turkey is our land bridge to Asia. We aren't a significant trade partner in the area. I imagine the industrials, miners and O&G sectors have notable risk and carry a sizeable weighting but depressingly, war is good business. Everyone likes war. Markets tend to fall on fears that it won't kick off and allow them to bury a whole load of bad news and then bank some massive deals but once the first shots are fired it's hard rally time as governments go shopping with limitless credit cards and no idea what to buy just knowing that they need to buy something from someone.
https://youtu.be/r3BO6GP9NMY
The Russians are effectively drawing a line in the sand against EU expansion. Russia only has two deep water ports accessing the Med, one is in Syria, hence their involvement there to keep the US and EU from blocking that and the other is Crimea, hence why they annexed it a few years ago.
Whether Russia wants the Ukraine back under its ownership or is just halting Teutonic expansion by using its military which it knows only the US element of NATO could stand up to and has zero interest in getting drawn into a problem caused solely by Germany and Brussels is debatable.
How it potentially impacts on the FTSE is hard to say. We do t ship much goods through Ukraine, Turkey is our land bridge to Asia. We aren't a significant trade partner in the area. I imagine the industrials, miners and O&G sectors have notable risk and carry a sizeable weighting but depressingly, war is good business. Everyone likes war. Markets tend to fall on fears that it won't kick off and allow them to bury a whole load of bad news and then bank some massive deals but once the first shots are fired it's hard rally time as governments go shopping with limitless credit cards and no idea what to buy just knowing that they need to buy something from someone.
https://youtu.be/r3BO6GP9NMY
'Biden says he believes Putin will "move in" the troops he has amassed on the border of Ukraine'
Well, that's interesting. He's just told Germany that NATO won't be used to support the EU expansionist policy.
He's pretty much given the green light to Russia to step forward and that everything will be ok when they do.
Well, that's interesting. He's just told Germany that NATO won't be used to support the EU expansionist policy.
He's pretty much given the green light to Russia to step forward and that everything will be ok when they do.
DonkeyApple said:
'Biden says he believes Putin will "move in" the troops he has amassed on the border of Ukraine'
Well, that's interesting. He's just told Germany that NATO won't be used to support the EU expansionist policy.
He's pretty much given the green light to Russia to step forward and that everything will be ok when they do.
To think that people complained about Trump (correctly) given how badly Biden seems to be treating this! Dumping EU allies in it, and avoiding any attempt at a bluff, which is the only thing that will likely work here!Well, that's interesting. He's just told Germany that NATO won't be used to support the EU expansionist policy.
He's pretty much given the green light to Russia to step forward and that everything will be ok when they do.
NRS said:
To think that people complained about Trump (correctly) given how badly Biden seems to be treating this! Dumping EU allies in it, and avoiding any attempt at a bluff, which is the only thing that will likely work here!
This is a problem created deliberately by the EU who have been pushing hard with Eastern expansion and using the dominance of the US military might within NATO to do so. Biden is an odd fish, that's for sure, but he has basically called Germany's bluff and said that American money and lives won't be used to stop a fight caused by Brussels on land that isn't part of NATO.
This is a good thing as the U.K. should not be drawn into a conflict of Brussels' making on land whose core purpose is to be a geographical buffer between East and West.
We all grew up under the fiasco of a hard border between East and West and no one in their right mind wants to return to that. But that is what Germany has wanted and it has wanted to use NATO as a tool to achieve that.
If you look back over the last two decades, Germany has pushed relentlessly East into ex Soviet territories, it has interfered in elections, it has tried to get an EU army to support expansionism as well as oppress internal dissent and lobbied to use NATO as a means of conquest instead of defence. We have a cultural legacy of seeing Russia as the bad guy but in this situation Russia is the PHer who goes away on holiday only to return to find their neighbour has built that new fence in their land.
The logical end game here could well be Russia annexing the bulk of the Russian speaking area of Ukraine while the remainder gets co-opted into the EU and NATO resulting in a hard border again with Russia which is frankly bloody stupid. The best security for Europe is to maintain the vital land and culture buffers of the Ukraine and Turkey as they are instead of endlessly provoking the nations in the other side with their land grabbing attempts backed by US military might.
What Biden has in theory done is make it clear to Germany that if they want a hard border with Russia they are going to have to use their own tanks and soldiers which will hopefully make them see sense and stop trying to annex the whole of Ukraine as Russia was happy sitting on the border of Ukraine remained independent.
In reality, for the last decade, the aggressor is the EU and they've been using America as a threat.
I hope that America clarifying its position, even if it's been done in a mumbling, care home rambling kind of way causes Germany to stop and think about the true consequences of what it has been doing as it's not good for any of us at all.
DonkeyApple said:
This is a problem created deliberately by the EU who have been pushing hard with Eastern expansion and using the dominance of the US military might within NATO to do so etc
Thanks DA but this is getting a little political and I was more interested in FTSE impact as I have a portfolio there. I'd welcome views on share impact if anyone has a view?Iamnotkloot said:
Thanks DA but this is getting a little political and I was more interested in FTSE impact as I have a portfolio there. I'd welcome views on share impact if anyone has a view?
My utterly uninformed view is that the FTSE will go down, then recover when people realise life goes on just the same.If you're very worried, sell all. If you're slightly worried, sell half...
I have a chunk in the FTSE and I'll sit it out, mostly because if I start dabbling there's an equal chance I'll mess it up anyway.
Yup. Hard to keep the politics out. 
In my mind, the US has just stated that it completely expects Russia to make an incursion if the EU doesn't back down and the FTSE has done bugger all overnight and this morning.
In many ways, this suggests that from the FTSE'a perspective it doesn't really care. Nukes are off the table, NATO can't be used by the EU to enter Ukraine and Russia will probably annex a chunk of Ukraine and stop where it feels the big economic sanctions might get applied.
Even the DAX appears pretty agnostic to Germany losing some of its 35% share of global trade with a relatively modest developing nation.
You get the feeling that a basic land grab and military incursion to the East is already factored in. You might get a dip when it happens but that when the new boundary begins to look settled then that will recover.
In my mind, the US has just stated that it completely expects Russia to make an incursion if the EU doesn't back down and the FTSE has done bugger all overnight and this morning.
In many ways, this suggests that from the FTSE'a perspective it doesn't really care. Nukes are off the table, NATO can't be used by the EU to enter Ukraine and Russia will probably annex a chunk of Ukraine and stop where it feels the big economic sanctions might get applied.
Even the DAX appears pretty agnostic to Germany losing some of its 35% share of global trade with a relatively modest developing nation.
You get the feeling that a basic land grab and military incursion to the East is already factored in. You might get a dip when it happens but that when the new boundary begins to look settled then that will recover.
DonkeyApple said:
This is a problem created deliberately by the EU who have been pushing hard with Eastern expansion and using the dominance of the US military might within NATO to do so.
Biden is an odd fish, that's for sure, but he has basically called Germany's bluff and said that American money and lives won't be used to stop a fight caused by Brussels on land that isn't part of NATO.
This is a good thing as the U.K. should not be drawn into a conflict of Brussels' making on land whose core purpose is to be a geographical buffer between East and West.
We all grew up under the fiasco of a hard border between East and West and no one in their right mind wants to return to that. But that is what Germany has wanted and it has wanted to use NATO as a tool to achieve that.
If you look back over the last two decades, Germany has pushed relentlessly East into ex Soviet territories, it has interfered in elections, it has tried to get an EU army to support expansionism as well as oppress internal dissent and lobbied to use NATO as a means of conquest instead of defence. We have a cultural legacy of seeing Russia as the bad guy but in this situation Russia is the PHer who goes away on holiday only to return to find their neighbour has built that new fence in their land.
The logical end game here could well be Russia annexing the bulk of the Russian speaking area of Ukraine while the remainder gets co-opted into the EU and NATO resulting in a hard border again with Russia which is frankly bloody stupid. The best security for Europe is to maintain the vital land and culture buffers of the Ukraine and Turkey as they are instead of endlessly provoking the nations in the other side with their land grabbing attempts backed by US military might.
What Biden has in theory done is make it clear to Germany that if they want a hard border with Russia they are going to have to use their own tanks and soldiers which will hopefully make them see sense and stop trying to annex the whole of Ukraine as Russia was happy sitting on the border of Ukraine remained independent.
In reality, for the last decade, the aggressor is the EU and they've been using America as a threat.
I hope that America clarifying its position, even if it's been done in a mumbling, care home rambling kind of way causes Germany to stop and think about the true consequences of what it has been doing as it's not good for any of us at all.
You're being very kind to Biden, his family and the US given their close involvement for many years in Ukraine.Biden is an odd fish, that's for sure, but he has basically called Germany's bluff and said that American money and lives won't be used to stop a fight caused by Brussels on land that isn't part of NATO.
This is a good thing as the U.K. should not be drawn into a conflict of Brussels' making on land whose core purpose is to be a geographical buffer between East and West.
We all grew up under the fiasco of a hard border between East and West and no one in their right mind wants to return to that. But that is what Germany has wanted and it has wanted to use NATO as a tool to achieve that.
If you look back over the last two decades, Germany has pushed relentlessly East into ex Soviet territories, it has interfered in elections, it has tried to get an EU army to support expansionism as well as oppress internal dissent and lobbied to use NATO as a means of conquest instead of defence. We have a cultural legacy of seeing Russia as the bad guy but in this situation Russia is the PHer who goes away on holiday only to return to find their neighbour has built that new fence in their land.
The logical end game here could well be Russia annexing the bulk of the Russian speaking area of Ukraine while the remainder gets co-opted into the EU and NATO resulting in a hard border again with Russia which is frankly bloody stupid. The best security for Europe is to maintain the vital land and culture buffers of the Ukraine and Turkey as they are instead of endlessly provoking the nations in the other side with their land grabbing attempts backed by US military might.
What Biden has in theory done is make it clear to Germany that if they want a hard border with Russia they are going to have to use their own tanks and soldiers which will hopefully make them see sense and stop trying to annex the whole of Ukraine as Russia was happy sitting on the border of Ukraine remained independent.
In reality, for the last decade, the aggressor is the EU and they've been using America as a threat.
I hope that America clarifying its position, even if it's been done in a mumbling, care home rambling kind of way causes Germany to stop and think about the true consequences of what it has been doing as it's not good for any of us at all.
Here is an alternative view on the meddling:
https://www.bbc.co.uk/news/world-europe-26079957
WayOutWest said:
You're being very kind to Biden, his family and the US given their close involvement for many years in Ukraine.
Here is an alternative view on the meddling:
https://www.bbc.co.uk/news/world-europe-26079957
I'm definitely being too kind. There's always a game at play and since the collapse of the USSR the games have been growing and in Ukraine accelerated when their banks collapsed a decade or so ago and the yen when the Russian backed president was binned. Here is an alternative view on the meddling:
https://www.bbc.co.uk/news/world-europe-26079957
The markets don't seem to give a toss who runs Ukraine though. Which is a little surprising.
Simpo Two said:
DonkeyApple said:
If you look back over the last two decades, Germany has pushed relentlessly East into ex Soviet territories
The last time they pushed relentlessly East it didn't end too well. You think they'd have learned!Having a look at an Atlas is the key to sobriety. I kind of ends the thought that Europe is an empire when it's just a small peninsula of Asia! You might as well dangle your wang into a pot of crocodiles.
Edited by DonkeyApple on Thursday 20th January 21:32
DonkeyApple said:
This is a problem created deliberately by the EU who have been pushing hard with Eastern expansion and using the dominance of the US military might within NATO to do so.
Biden is an odd fish, that's for sure, but he has basically called Germany's bluff and said that American money and lives won't be used to stop a fight caused by Brussels on land that isn't part of NATO.
This is a good thing as the U.K. should not be drawn into a conflict of Brussels' making on land whose core purpose is to be a geographical buffer between East and West.
We all grew up under the fiasco of a hard border between East and West and no one in their right mind wants to return to that. But that is what Germany has wanted and it has wanted to use NATO as a tool to achieve that.
If you look back over the last two decades, Germany has pushed relentlessly East into ex Soviet territories, it has interfered in elections, it has tried to get an EU army to support expansionism as well as oppress internal dissent and lobbied to use NATO as a means of conquest instead of defence. We have a cultural legacy of seeing Russia as the bad guy but in this situation Russia is the PHer who goes away on holiday only to return to find their neighbour has built that new fence in their land.
The logical end game here could well be Russia annexing the bulk of the Russian speaking area of Ukraine while the remainder gets co-opted into the EU and NATO resulting in a hard border again with Russia which is frankly bloody stupid. The best security for Europe is to maintain the vital land and culture buffers of the Ukraine and Turkey as they are instead of endlessly provoking the nations in the other side with their land grabbing attempts backed by US military might.
What Biden has in theory done is make it clear to Germany that if they want a hard border with Russia they are going to have to use their own tanks and soldiers which will hopefully make them see sense and stop trying to annex the whole of Ukraine as Russia was happy sitting on the border of Ukraine remained independent.
In reality, for the last decade, the aggressor is the EU and they've been using America as a threat.
I hope that America clarifying its position, even if it's been done in a mumbling, care home rambling kind of way causes Germany to stop and think about the true consequences of what it has been doing as it's not good for any of us at all.
Possibly one of the most thought-provoking posts I’ve ever read on here. I like to think I’m in possession of an open mind with the best of them, but this has really made me pause to consider whether my view of Euro-US-Russian politics is really true. Thank you!Biden is an odd fish, that's for sure, but he has basically called Germany's bluff and said that American money and lives won't be used to stop a fight caused by Brussels on land that isn't part of NATO.
This is a good thing as the U.K. should not be drawn into a conflict of Brussels' making on land whose core purpose is to be a geographical buffer between East and West.
We all grew up under the fiasco of a hard border between East and West and no one in their right mind wants to return to that. But that is what Germany has wanted and it has wanted to use NATO as a tool to achieve that.
If you look back over the last two decades, Germany has pushed relentlessly East into ex Soviet territories, it has interfered in elections, it has tried to get an EU army to support expansionism as well as oppress internal dissent and lobbied to use NATO as a means of conquest instead of defence. We have a cultural legacy of seeing Russia as the bad guy but in this situation Russia is the PHer who goes away on holiday only to return to find their neighbour has built that new fence in their land.
The logical end game here could well be Russia annexing the bulk of the Russian speaking area of Ukraine while the remainder gets co-opted into the EU and NATO resulting in a hard border again with Russia which is frankly bloody stupid. The best security for Europe is to maintain the vital land and culture buffers of the Ukraine and Turkey as they are instead of endlessly provoking the nations in the other side with their land grabbing attempts backed by US military might.
What Biden has in theory done is make it clear to Germany that if they want a hard border with Russia they are going to have to use their own tanks and soldiers which will hopefully make them see sense and stop trying to annex the whole of Ukraine as Russia was happy sitting on the border of Ukraine remained independent.
In reality, for the last decade, the aggressor is the EU and they've been using America as a threat.
I hope that America clarifying its position, even if it's been done in a mumbling, care home rambling kind of way causes Germany to stop and think about the true consequences of what it has been doing as it's not good for any of us at all.
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