Geopolitical Risk

[Waltzing]

Just when you thought you were living in a Helen and Jacinda world...

Actually this is the real world ...

https://www.telegraph.co.uk/news/2023/08/24/putin-prigozhin-surovikin-wagner-oligarchs/

[kiwi2007]

https://www.understandingwar.org/backgrounder/russian-offensive-campaign-assessment-august-26-2023

Ukrainian forces have made further tactically significant gains in western Zaporizhia Oblast, and several Ukrainian and Russian sources reported that Ukrainian forces are advancing through what Ukrainian and US sources suggested may be the most challenging series of prepared Russian defensive positions.

Ukrainian forces now appear within striking distance of the next series of prepared Russian defensive positions, which may be weaker than the previous set of Russian defenses but still pose a significant challenge.

A Ukrainian source indicated that Russian forces have laterally redeployed elements of a relatively elite formation from the Kreminna area in Luhansk Oblast to the Robotyne area in western Zaporizhia Oblast.

Russian irregular formations remain willing to threaten to withdraw from combat unilaterally despite recent efforts by Russian military command to purge and suppress insubordination.

Russian forces conducted offensive operations along the Kupyansk-Svatove-Kreminna line, near Bakhmut, along the Avdiivka-Donetsk City line, and in western Donetsk Oblast but did not make any confirmed advances.

Russian regional governments continue to facilitate the forced deportation of Ukrainian children from occupied Ukraine to occupied Crimea.

[Onemootpoint]

With reference to the posts on financial education last week. This today:

Stephen Agnew argues that financial education has its limits, meaning if we want New Zealanders to be better with money, we need to start at home

https://www.interest.co.nz/personal-finance/123981/stephen-agnew-argues-financial-education-has-its-limits-meaning-if-we-want

[Onemootpoint]

Posted this in the 'international' section but relevant here as well:

Interesting discussion about the integration of tech companies as it relates to chip manufacturing.

Chip WAR: Chris Miller on Nvidia, TSMC dominance & risks | nzherald.co.nz

https://www.youtube.com/watch?v=weIAUzfByH0

[Waltzing]

Grain... now Rice ..

https://edition.cnn.com/2023/08/28/business-india/india-rice-ban-export-farmers-loss-intl-hnk-dst/index.html

[Waltzing]

What impact will an even longer war than expect do to europes economy in the next 2 to 3 years. Are we now in groundhog day and markets will   stagnate...

This articles talks of a long war ... it really looks like a LOT MORE equipment will be needed and where is it going to come from and at what economic cost.

"he Russians won't stop, he said, "you can't negotiate with them". The West doesn't understand this. Young soldiers who expected to be home in a year realise now, he said, they will be gone longer."

https://www.bbc.com/news/world-europe-66581217

[Onemootpoint]

And a couple of weeks ago we read that the German citizens are not too pleased with their current regime being at the USA beck and call all the while imported gas from the same country cost so much more.

Will German support/ funding fade?

[Waltzing]

Markets entering  a stagnation period ? or a slow grind higher based only on western growth?

India and Asia are just a pollution machine ?

 and people talking like this about bombing the ukraine where is the new age of enlightenment....

https://www.rferl.org/a/russia-drone-attack-soltsy-invasion-ukraine-war/32569556.html

""We need to bomb them so that they won't even consider [attacking Soltsy], but only be afraid," one woman called Svetlana Lvovna said."

[Shareguy]

From Craigs

Will we see a post- election rally?
We're just six weeks out from the election.
The campaign is heating up and policy announcements are coming thick and fast.
It could still be a close race, but some recent polls suggest an increasing likelihood we'll see a changing of the guard.
How might financial markets perform in the aftermath of the election, and would a National victory prompt a rally in share prices?
I looked at the past ten elections, which takes us back to 1993 when Jim Bolger's National party won a second term.
In those 30 years there have been five victories apieces for our two major parties, Labour and National.
On six of those ten occasions the sharemarket has pushed higher in the following 90 days, with an average gain of 2.7 per cent.
When it's been a win for National, the average gain has been stronger at 4.6 per cent.
When Labour has emerged triumphant, the average post-election rise has been 0.9 per cent. That's more subdued, but it's a rise nonetheless.
At face value, it appears the market has typically cheered a National victory more so than a Labour one.
This makes some sense, with the former generally considered to be a more business-friendly party.
Having said that, there are many factors that impact the economy and the business environment just as much as (if not more than) the political backdrop.
The 2008 election is an obvious example.
We were in the thick of the GFC at the time, and the New Zealand sharemarket had already fallen more than 20 per cent from its peak the previous year.
Sir John Key's National party won in November 2008, and the market kept falling until it finally found a bottom in March 2009.
If we exclude 2008 from our analysis, the average sharemarket return in the 90 days following a National victory jumps to 5.8 per cent.
Another period that stands out is 1993, when the sharemarket rallied strongly after the election. This period has boosted the average gain for when National has won.
If we exclude 1993 as well, we're back at 3.3 per cent for a post-National rally. That's less impressive, but it's still above average.
Looking at moves in fixed income and the NZ dollar in the wake of past elections, we've generally seen conservative assets rise in value and the currency find a bit of support.

                                                     Bonds have produced positive returns seven out of ten times, with an average gain of 1.4 per cent, while the currency has increased on eight of ten occasions with an average gain of about one per cent.
Again, the 2008 election is a major outlier.
At that time, interest rates were collapsing because of increasing risk aversion (pushing bond values up) while the currency had slumped from US$0.80 to US$0.70 and was headed for a low of US$0.49 about six months later.
That example aside, one can generally deduce that fixed income has traditionally performed solidly after elections and the currency has found a bit of support.
Excluding 2008, the NZ dollar has gained 3.5 per cent (on average) following a National party victory and 1.6 per cent after a Labour win.
The economic and market backdrop during any election period is always unique, and 2023 is certainly no different.
However, the past 30 years suggest the market has typically performed well in the aftermath of an election, more so when we've seen a National victory.
One thing that's much less ambiguous is the fact that whoever ends up in parliament will inherit a challenging backdrop.
The dairy sector is under pressure, our fiscal position is deteriorating and we've got an inflation problem that's proving hard to get on top of.
Elections can impact investor sentiment and business confidence, but share prices will ultimately be driven by the path of the economy and corporate earnings.
We'll have to wait until October 14 to see how these challenges influence the post-election market performance.

[Waltzing]

Has the West gravely under estimated "as long as Takes"

They are likening it to Verdun ... here in the west we are shield from the true situation by our press being absent from the front lines...

One man braves the terror to find the truth on the step...

https://www.bbc.com/news/world-europe-66621724

Well Verdun was horrific by all accounts...https://en.wikipedia.org/wiki/Battle_of_Verdun

[Onemootpoint]

.... and people talking like this about bombing the ukraine where is the new age of enlightenment....

https://www.rferl.org/a/russia-drone-attack-soltsy-invasion-ukraine-war/32569556.html

""We need to bomb them so that they won't even consider [attacking Soltsy], but only be afraid," one woman called Svetlana Lvovna said."

Russia says major Ukraine drone attack reaches deep into its territory

https://www.stuff.co.nz/world/europe/300961358/russia-says-major-ukraine-drone-attack-reaches-deep-into-its-territory

[Onemootpoint]

From Craigs

Will we see a post- election rally?........

Interesting. Thanks for posting.

(I'm sure some will say 'this time will be different'    Maybe it will, maybe it won't.)

[Waltzing]

Oh NO it appears that we have a strategic competitor across the Tasman as the EMU-ites  have out number 8 wired the Kiwi's in their gumboots...
 
An empire brought down by a cardboard flying Kite...  a kit set box drone...

https://www.telegraph.co.uk/world-news/2023/08/30/cardboard-drones-ukraine-strike-russian-planes-kursk/

[mcdongle]

Of course Russian LNG costs a lot more than gas through a pipeline that you have blown up...

https://www.theguardian.com/business/2023/aug/30/eu-imports-of-russian-liquified-gas-leap-by-40-since-ukraine-invasion

[Waltzing]

Ukraine lose 6 pilots in mission gone wrong ... 2 helicopters crashed with troops on board.

https://edition.cnn.com/europe/live-news/russia-ukraine-war-news-08-31-23/index.html