BarroMetrics Views: Crimea
If we have a look at a map, we see that Crimea is totally dependent on Ukraine for essential services. Annexing Crimea without a follow-up invasion of Ukraine does not make sense. So, I do expect that once the Crimean annexation settles down, we’ll see a Russian invasion of Ukraine. Part of this ‘blame’ for the such an invasion must fall on the West because of its weak response to the Crimean annexation.
So far, the sanctions imposed by the US are those on Russian individuals. It has refrained from imposing sanctions on the Russian economy. Hardly stuff that would cause any Russian angsts.
Moreover Obama has come into this crisis with a blotted copy book: he has given way on Syria, and Iran.
My view is Putin sees Obama has a weak president. In his latest speech some 10-mins ago, Obama is clearly not going to do anything about Crimea. He has threatened more severe sanctions if ‘Russia takes it further’.
France has been reluctant to impose serious sanctions because such a move would threaten its warship sales to Russia; Germany is in the same ship for different reasons: it worries about the impact on its oil imports.
US stocks are ignoring the Russian threats to Europe and are focusing solely on the FED. More about that next week. But, so far as Europe is concerned, it seems to me that Crimea the 21st century’s answer to Hitler’s Anschluss; will a Russian invasion of Ukraine be the modern answer to the invasion of Poland?
Not that I expect the West to enter a ‘hot’ war if Russia does invade; but if Obama is to give his presidency any credibility he will have to the US impose serious economic sanctions, and at least, bring Germany into his camp. Such a move will impact the world economy and may well be the black swan event that separates the FED from the belief that it can prevent a bear market for stocks.