A bridge too far. Russia about to default, and Donbass conventional arms support for Russian troops will run up against supply limitations. FTR
In so many words, the entire conventional ground war against Ukraine by the Russian Federation is going to run up against resupply logistics and striking limitations due to default on financial loan issues coming up. What Putin has remaining left is verbiage to terrify Western backers, of Ukraine, by threats to go nuclear, as well as the ever present threat to invade the Baltic states.
In so many words, we face nonstop gas lighting by the Russian Federation as Russia under Putin faces conventional arms exhaustion, in Ukraine and else where.
For maybe a month, this will actually increase the risk as to the Russian Doctrine of 'de escalation ( of conventional arms failure) by threats of use of nuclear weapons (a mainstay of Russian battlefield tactics going back to the 1970s), but we can at least understand the phase we are enterinng
While some of the verbiage from Moscow may in July seem utterly horrific, if we know it is coming, we can prepare to blunt the onset of savage verbiage , as Putin faces conventional arms limitations. Arms limitations which dents Russian "great power" aspirations
https://www.bloomberg.com/news/articles/2022-06-26/russia-is-hours-away-from-its-first-foreign-default-in-a-century#xj4y7vzkg
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Russia Is Hours Away From Its First Foreign Default in a Century
June 26, 2022, 3:00 AM EDT
After months of teetering on the edge of default, Russia is now just hours away from a dramatic moment in the financial battle that the US and others have waged against the Kremlin over its invasion of Ukraine.
A grace period on about $100 million of missed bond payments -- blocked because of wide-ranging sanctions -- ends on Sunday night. There won’t be an official declaration, and Russia is already disputing the designation, but if investors don’t have their money by the deadline, there will be an “event of default” on Monday morning, according to the bond documents.
Out of Time
Russia's grace period on missed bond payments in May is about to expire
Source: Bloomberg News
Includes euro and dollar payments. Figures rounded.
It’s largely a symbolic development for now, given that Russia is already an economic, financial and political outcast across most of the world. But it showcases how the US, Europe and others have?tightened the screws?since the invasion started in February to make it all-but impossible for Russia to conduct what would otherwise be normal financial business.
For Russia, it will mark its first foreign default since the Bolshevik repudiation of Czarist-era debts in 1918. The country tipped very near to such a moment earlier this year, but managed a last-ditch escape by switching payment methods. That alternative avenue was subsequently shut off in May -- just days before the $100 million was due -- when the US closed a sanctions loophole that had allowed American investors to receive sovereign bond payments.
Now the question is what happens next, as markets are faced with the unique scenario of a defaulted borrower which has the willingness and resources to pay, but can’t.?
Major ratings agencies would usually be the ones to issue a default declaration, but sanctions bar them from Russian business. Bondholders could group together to make their own statement, but they may prefer to wait to monitor the war in Ukraine and the level of sanctions as they try to figure out the chance of getting their money back, or at least some of it.
“A declaration of default is a symbolic event,” said Takahide Kiuchi, an economist at Nomura Research Institute in Tokyo. “The Russian government has already lost the opportunity to issue dollar-denominated debt. Already as of now, Russia can’t borrow from most foreign countries.”
Prospectus for 2026 Bond: Russian Federation.Source: Bloomberg
As the penalties on Russian authorities, banks and individuals have increasingly cut off payment routes, Russia has argued that its met its obligations to creditors by transferring the May payments to a local paying agent, even though investors don’t have the funds in their own accounts.
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Earlier this week, it made other transfers in rubles, despite the fact that the bonds in question don’t allow that payment option.
Finance Minister Anton Siluanov has cited “force-majeure” as a justification for the currency switch, calling the situation a “farce.” The legal argument of force majeure?hasn’t?historically encompassed sanctions, according to lawyers who spoke to Bloomberg earlier this month.
“There is every ground to suggest that in artificially barring the Russian Federation from servicing its foreign sovereign debt, the goal is to apply the label of ‘default’,” Siluanov said Thursday. “Anyone can declare whatever they like and can try to apply such a label. But anyone who understands the situation knows that this is in no way a default.”
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Next
https://www.newsweek.com/russian-army-could-soon-run-out-weapons-troops-boris-johnson-1718302
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Russian Army Could Soon Run out of Weapons and Troops: Boris Johnson
BY?JAKE THOMAS?ON 6/22/22 AT 7:21 PM EDT
British Prime Minister?Boris Johnson?says that the Russian military's push in eastern Ukraine is exacting a high toll on its troops and resources, which he said could thwart future advances by the Kremlin.
Johnson, citing intelligence from his country's defense services, remarked on the momentum of Russian troops and potential for exhausting their resources in an interview published Wednesday by Germany's?Süddeutsche Zeitung, reports Reuters. The British prime minister offered a more upbeat outlook on Ukraine's position in the conflict following reports that Russia has gained ground after pivoting its war effort.
After failing to take the Ukrainian capital city of Kyiv earlier in the conflict, Russia's military has turned to the Donbas region in eastern Ukraine. The region is home to a large Russian-speaking population and two breakaway republics friendly with the regime of Russian President?Vladimir Putin.
Russian forces?have seen success?in their new push in Donbas and?have taken control over?much of the strategically important city of Severodonetsk
In this combination image, A Ukrainian serviceman carries a fragment of a rocket outside a building in Kyiv on March 24, 2022, Vladimir Putin (Left inset) chairs a meeting with members of the Security Council via a teleconference call in Moscow on June 22, 2022 and British Prime Minister Boris Johnson speaks to media as he arrives at RAF Brize Norton on June 18, 2022 in Brize Norton, England.
However, Johnson suggested Russia's recent gains won't hold.
"Our defence intelligence service believes, however, that in the next few months, Russia could come to a point at which there is no longer any forward momentum because it has exhausted its resources," Johnson said in the interview, according to Reuters.
The U.K. Ministry of Defence said in an assessment of the conflict earlier this month that Russian forces "have generated and maintained momentum" over Ukrainian troops and were on the cusp of taking full control of the Luhansk region.
But the ministry's assessment found these gains came at a "significant resource cost" and Russia maintaining them would require a "continued huge investment of manpower and equipment."
Johnson has been a vocal supporter of Ukraine and its president,?Volodymyr Zelensky, and last week made a high-profile visit to Kyiv. He said he would argue for continued military support for Ukraine at a summit of the Group of Seven (G7)—a meeting of advanced industrial democracies—in Germany over the weekend, according to Reuters.
"In as much as the Ukrainians are in a position to start a counter-offensive, it should be supported. With equipment that they demand from us," Johnson said, according to Reuters.
The British leader made the remarks in an interview with?Süddeutsche Zeitung, among other European media outlets.
When asked by Italy's?Corriere della Sera?newspaper about how the conflict should end, Johnson said Russian forces should be expelled from areas of Ukraine they've invaded. For that to happen, he said Western powers must continue aiding Ukraine.
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Andrew Beckwith, PhD