Long Term Economic Fallout From War In Ukraine

[dtbach]

When you look at those planes on Flight Radar, move your cursor over a plane and click on it. It will tell you info about the flight including it's origin and destination. There are plenty of flights out of Russia to other nations, just not NATO nations. It's a big world folks. Many nations are staying out of this or outright support Russia.
What I read in your posts is that the rest of the world is under a no fly zone for Russian commercial aircraft. That simply isn't so.

But there are still plenty of screws yet to tighten on them.

 

[mpeirce]

.
What I read in your posts is that the rest of the world is under a no fly zone for Russian commercial aircraft. That simply isn't so.

It’s propaganda on all sides. Neither are the “good guys”.

War is bad, we should stay out of it.

 

[Bamaman]

I agree with so much that's been said. We can continue in hibernation at home--like the last two years during the pandemic. We drive a hybrid car so the gasoline price increases are not changing our driving habits.

We're still traveling to Europe once or twice a year, but our June trip with a stop St. Petersburg is cancelled. We're going to London and may hit The Alps--staying in small cities farther west. We have already been to Russia, but don't look to go again despite what happens in Ukraine.

I am afraid mostly of the value of the dollar and inflation. With Ukraine being #4 worldwide in many grain crops, U.S. crop prices will be very expensive as Ukraine agriculture will be curtailed greatly--at least until the military actions are solved. The question is whether our farmers can afford $5 a gallon diesel and super expensive fertilizers for current acreage--much less increased acreage? Are they willing to step up production to feed Europe?

Fuel has always been overtaxed and therefore overpriced in Europe, and they're going to see even higher energy prices. London petrol was $7.59 the other day per U.S. gallon--for example. And many EU countries screwed up putting all their energy eggs in hands of Russia--no matter who's in charge there. Their standard of living will suffer much more than ours. And factory production may suffer due to natural gas prices and availability.

Who knows what the outcome in the Ukraine will be? It looks like Putin intends to bomb their major cities to the ground--and Russia will never have the resources to rebuild. Poland, Hungary and other countries that are being overrun with refugees, but their resources are limited. We've been warned locally that many war refugees are headed our way too. Our foster family organizations will be stepping up to the plate. And I cannot see those that get this far, especially young orphans, moving back home again.

 

[ivinsfan]

Bama the issue with fertilizer will not only be price , there will be no fertilizer at all. We have had all our Spring fert paid for since Jan 3. Will we get it, that remains to be seen.

 

[Popeye]

Bama the issue with fertilizer will not only be price , there will be no fertilizer at all. We have had all our Spring fert paid for since Jan 3. Will we get it, that remains to be seen.

Why would there be an issue with fertilizer availability? I’m curious since the fertilizer companies were one our biggest customer segments at Megacorp. They had been upgrading for increased production, reopening plants, even building new plants in the US once fracking brought down the cost of natural gas.

 

[ivinsfan]

Why would there be an issue with fertilizer availability? I’m curious since the fertilizer companies were one our biggest customer segments at Megacorp. They had been upgrading for increased production, reopening plants, even building new plants in the US once fracking brought down the cost of natural gas.

It's complicated....I'm an end user so prices are dramatically higher and have been trending that way for a long time. Just in time delivery is an issue as well. Corn acres require a tremendous amount of fertilizer.



You have to have ingredients to blend fertilizer.

 

[Surewhitey]

From a purely stock market view, what about Boycotts of Russia? For example, if Burger King boycotts Russia, they lost that revenue. No else is buying more burgers to make that up - the sales are just lost. Thus, if Russia is, say 5% of sales, their revenue will be down that amount. Thus, many businesses that are boycotting Russia will have earnings reduced...which usually shows up in quarterly revenues and profits.

I would suspect that the currency devaluation (immediate 50%+) would make it hard to make money in any business that is dollar based. They're likely going for profit with less revenue vs less of both by staying open. People probably are hoarding necessities vs Whoppers @ 50% more cost.

 

[marko]

Maybe eventually inflation will push this thread over and merge with the "Blow That Dough" thread.

Personally, I just can't overly worked up. What will happen will happen but over my life things haven't changed all that much. I still go to the same places, do the same things, eat at good restaurants that I always did despite wars, global warming, high taxes, high prices and all the other social ailments. The mess in Ukraine is awful but there's not much we as individuals do about it.

Right now, I'm looking out my window at my neighbors on the beach in Fort Lauderdale and inflation, war and Covid are the furthest thing from their minds.

 

[Mr. Tightwad]

Why would there be an issue with fertilizer availability? I’m curious since the fertilizer companies were one our biggest customer segments at Megacorp. They had been upgrading for increased production, reopening plants, even building new plants in the US once fracking brought down the cost of natural gas.

Russia is the world's leading fertilizer exporter.

 

[Gearhead Jim]

Russia is the world's leading fertilizer exporter.

There is more, uh, "fertilizer" coming out of Russia than ever before.

 

[Markola]

We watched the new Frontline about Vladimir Putin or, as he seems to think of himself, “Vladimir the Great”. Recommended.

 

[yhoomajor]

Saudi Arabia considering use of Chinese Yuan for Oil Sales to China.

https://www.foxbusiness.com/markets/saudi-arabia-considers-accepting-yuan-chinese-oil-sales

 

[brett]

Russia will experience two things in the short term.

The first will be an absence of capital investments.

The second will be the start of an immediate brain drain.

Both will have lasting negative impacts on Russia.

People with expertise/talent, who are mobile or who can get around the visa issue for those of military age will leave the country. Quickly...because the writing is on the wall. Things will only get worse from an individual perspective.

Plus all the other issues relating to businesses closing, embargoes, currency devaluation, etc.

 

[golfnut]

Kinda have to hope there are long term things to worry about. Putin is very difficult to figure out especially if things are not going his way. Just wish somehow, some way he gets kicked to the curb, killed . whatever.

 

[wildsun]

This is fun ---- trying to figure out what the long term damage will be to the world economy and investing, based on the awful mess that we've created so far.

l would narrow the focus though. What I want to know is what strategies are people in this forum using to protect their own retirement investments during this period. I've been watching what is going on, and part me thinks its time to move into a much more protective investment strategy. But what would that be. And what are other folks who are worried doing about it. Does the conventional wisdom about investing still apply, or has the game changed so dramatically that we need to change the way we think about our money and resources.

Risk is skyrocketing these days. How do we compensate.

 

[marko]

This is fun ---- trying to figure out what the long term damage will be to the world economy and investing, based on the awful mess that we've created so far.

l would narrow the focus though. What I want to know is what strategies are people in this forum using to protect their own retirement investments during this period. I've been watching what is going on, and part me thinks its time to move into a much more protective investment strategy. But what would that be. And what are other folks who are worried doing about it. Does the conventional wisdom about investing still apply, or has the game changed so dramatically that we need to change the way we think about our money and resources.

Risk is skyrocketing these days. How do we compensate.

As I posted on this thread (#58) exactly 3 years ago, I don't see much difference between then, now and 20 years ago. There's always been risk and opportunity at the same time. It depends upon how you address it but there's always some calamity.

We've discussed this risk aspect on other threads recently; most here are staying the course, I'd say. That's what I'm doing. It's the old "just don't do something, stand there!" approach.

 

[kgtest]

I don’t think we really appreciate how small the Russian economy is.

Solid point. I have a good friend whose family is in Russia. A few years back, he took one of my best friends to Russia for a VIP trip. The coolest thing they did was sit in a sauna that was heated with chopped wood.

Spent almost 0 money while he was there. There is no economy for most Russians. It's bleak.

 

[kgtest]

This is fun ---- trying to figure out what the long term damage will be to the world economy and investing, based on the awful mess that we've created so far.

l would narrow the focus though. What I want to know is what strategies are people in this forum using to protect their own retirement investments during this period. I've been watching what is going on, and part me thinks its time to move into a much more protective investment strategy. But what would that be. And what are other folks who are worried doing about it. Does the conventional wisdom about investing still apply, or has the game changed so dramatically that we need to change the way we think about our money and resources.

Risk is skyrocketing these days. How do we compensate.

My father sold $1million of equities, all large cap high tech MAG 7 stocks.

Said he was too old to wait for a recovery. He is 74.

 

[Exchme]

Interesting how the world has adapted since Russia's attempt to conquer Ukraine started. None of OP's original worries have come to pass - Ukraine has not collapsed, it's food still gets to market, either via their own ports or on Russian ships if grown on land that Russia grabbed so food prices have not gone up more than other prices, no famines. LNG gets shipped to Europe in adequate amounts. Russian oil gets to market somehow using their leaky shadow fleet via countries that don't respect the sanctions.

The biggest impacts outside Russia and Ukraine may be the defense industries. The US has a decade plus order backlog, most of Europe has still hardly done any arming up. Defense experts are stunned at the unreasonable effectiveness and mind boggling rate of advance of drone warfare and wondering how much good are all those tanks in a world where drones can flood the skies on the cheap.

Just goes to show that the world can absorb even terrible shocks and mostly go on like before. Folks that focus on the bad don't count on how resourceful people can be and so they tend to over-react to bad news.

 

[Gearhead Jim]

This is fun ---- trying to figure out what the long term damage will be to the world economy and investing, based on the awful mess that we've created so far.

l would narrow the focus though. What I want to know is what strategies are people in this forum using to protect their own retirement investments during this period. I've been watching what is going on, and part me thinks its time to move into a much more protective investment strategy. But what would that be. And what are other folks who are worried doing about it. Does the conventional wisdom about investing still apply, or has the game changed so dramatically that we need to change the way we think about our money and resources.

Risk is skyrocketing these days. How do we compensate.

Trump and Putin are both wild/crazy cards. Figuring out what they will do and how it will effect our investments is impossible. My current plan is to keep our equity position steady at about 50% but go to shorter maturities on the fixed income side.
Aske me in ten years if that was a good idea...

 

[skipro33]

In the 3 years since 2022 when this thread was started, to today, my IRA has grown over 40%. I'm glad as heck I didn't panic then, and I'll be glad as heck in another 3 years that I didn't panic now.

 

[marko]

My father sold $1million of equities, all large cap high tech MAG 7 stocks.

Said he was too old to wait for a recovery. He is 74.

I'm 73 and just bought up some nice bargains. I'd expect the recovery from this dip is less than a month or two away, but everyone has their own strategy.

In the 3 years since 2022 when this thread was started, to today, my IRA has grown over 40%. I'm glad as heck I didn't panic then, and I'll be glad as heck in another 3 years that I didn't panic now.

Amen. Yeah, made me look: I'm up 31% since this thread was started. As in much of life, when it comes to investing, emotions can cause irrational and unfortunate actions. For me, more time looking at data and history and less time watching the media is key. The shelf-life of their "breaking news" disasters are getting shorter and shorter.

 

[Dtail]

Trump and Putin are both wild/crazy cards. Figuring out what they will do and how it will effect our investments is impossible. My current plan is to keep our equity position steady at about 50% but go to shorter maturities on the fixed income side.
Aske me in ten years if that was a good idea...

Same here

 

[marko]

For fun, I asked Grok to give me an analysis of Dow performance during WWI, WWII, Korea, Viet Nam, Gulf and Iraq wars. All of them horrible events and potential global disasters.

Short story: (my words, Mods) The market is fairly resilient and quickly adapts to even the most severe global catastrophes. First, a short term drop, (weeks or months) then, with a few exceptions, a long term upward trend.

[I started writing the details but decided to leave them out in order to stay within forum AI regs to keep it short]

 

[RunningBum]

For fun, I asked Grok to give me an analysis of Dow performance during WWI, WWII, Korea, Viet Nam, Gulf and Iraq wars. All of them horrible events and potential global disasters.

Short story: (my words, Mods) The market is fairly resilient and quickly adapts to even the most severe global catastrophes. First, a short term drop, (weeks or months) then, with a few exceptions, a long term upward trend.

[I started writing the details but decided to leave them out in order to stay within forum AI regs to keep it short]

Weren't the failures in the Trinity study starting in the late 60s? Vietnam War era following by high inflation?

This highlights what concerns me about AI. You asked Grok about Dow performance, and the market itself probably recovered enough to satisfy the question. But with inflation you came out worse. You didn't really ask the right question, and you let Grok do the work so you didn't realize it. People will get more reliant on AI and more and more will accept the answers without realizing the question was bad, or maybe the AI was wrong. Trust but verify applies, IMO.