Deep dive: Ukraine

What is going on there? And more importantly - how to trade it?

I have already written an extensive article on one of the regional conflict zones we have. It is high time I write about the other one, the one a bit closer to my mind. Closer, because I am from CEE so two and a half years ago, the news on Russian invasion hit very hard and I saw the ripple effects of it in the coming months with my own eyes as I was in my home country at that time. My relative proximity to the conflict (I have around 1,000 km / 600 miles to Kiev so not that close) makes it feel more real than quite remote Middle East.

That being said, I have no ties to either Ukraine or Russia. I am treating this conflict with the same rationalistic scrutiny as the Middle Eastern one. As usual I am fading MSM narratives and have my own opinions on the causes and effects of this clash. Some you might disagree with, some may even anger you (I hope that is not the case anymore anon), but I think that at closer inspection you will agree with many, especially in the context of prediction market trading.

This piece, similarly to the previous one on war, will give you my detailed framework of the conflict, stripped of any war propaganda narratives and unnecessary lessons in recent history. If you want lessons in recent history, go and listen to Jeffrey Sachs - he is more right than many like to admit and a quite good speaker. He has also done a lot in CEE post Soviet Union collapse so he knows a thing or two about the region. Here we will focus on Russian foreign policy, Ukraine in Russia’s puzzle, NATO’s interest in Ukraine (so policy + incentives) and next steps in the conflict, divided into two paths:

• Kamala Harris victory,

• Donald Trump victory.

This is not clairvoyance (I will let you know as soon as I achieve this skill), but probabilistic analysis. I may be wrong (rarely) and I pay for being wrong. My incentive is to be right as I profit from it. I will spare you further rant on propaganda as it is quite futile (although some say it sells) - I am doing research here not news.

That being said, go ahead, pick my brain a bit and leave a comment if you disagree or have some insights - discussion is a powerful tool that allows us to accept the differences in opinions and make one step forward in our pursuit of truth.

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Baseline

Wars are a difficult topic, a complex one where I, without any security clearance, have no more information than you. We have our fancy live maps, photos, etc. but the truth is that we know little. Additionally we need to filter the noise. The scraps we are left with are not much, but enough to form a high-level picture and a working theory of what will happen.

In this piece we will go one by one to understand what are each party’s incentives in this conflict:

• Russia foreign policy ie. why did Russia invade,

• Ukraine on the geopolitical chessboard, ie. why so much fuss about some developing country in EE,

• NATO involvement, ie. why US and others spend billions on Ukrainian defense,

• Current state of the war,

• Next developments,

• Markets analysis and betting approach.

I have a lot of ground to cover so let’s dive into it.

Russia Foreign Policy

To even start understanding what may happen in Ukraine, you need to understand why Russia invaded Ukraine in the first place. And contrary to MSM narrative it is not because Putin has imperialistic wet dreams. Also Russia is nowhere near enough capacity to launch subsequent campaigns into other Eastern European countries.

I will not focus here on the totality of the foreign policy, BRICS and whatnot. I will focus on the policy in relation to neighboring countries. And Russia has quite a few of them. Being the biggest country (territory-wise) Russia borders with:

• Norway,

• Finland,

• Estonia,

• Latvia,

• Lithuania*,

• Poland*,

• Belarus,

• Ukraine,

• Georgia,

• Azerbaijan,

• Kazakhstan,

• Mongolia,

• China,

• North Korea.

* Through Kaliningrad

That is quite a lot of ground to cover. To be exact it is 20,139 km (12,514 mi) of border to guard. This is for a nation of 144 million people. You may see where I am going with this.