From Russia With "Love"

"From Russia With Love" is the title of a 1963 James Bond film. Bond is lured to Russia by SPECTRE, a criminal organisation under the guise of helping a Soviet agent defect. The agent herself was tricked into believing she was working for SMERSH (Soviet counterintelligence).?

Fast forward to 2022, and Russia is still in the business of “showing” love. This newsletter is a bit longer than usual. We are going to be navigating the worlds of geopolitics/financial markets, then ending at the bus stop of personal finance.?

In the last few weeks, the drums of war have been beating. Russia has moved troops close to Belarus, one of the countries that border Ukraine, its neighbour. Tensions have arisen because those moves suggest Russia will invade Ukraine. In 2014, Russia invaded Crimea, a region in Ukraine, and annexed it.

Many years ago, Russia, Ukraine, and a couple of other countries were one big piece known as the USSR? (Soviet Republic), which later broke down and the countries split.?

Two days ago, Russia gave its “blessing” to two breakaway parts of Ukraine (Donetsk and Luhansk) collectively known as the Dunbas Republic, and will send peacekeeping forces.

?Putin also hit Ukraine calling its moves to join NATO a threat to Russia. The US has responded with plans to impose sanctions on those regions.?

Putin is uncomfortable with Ukraine adopting “Western democracy.” Being so close to its borders, he worries that clamour and influence will creep in.?

Let’s move to markets.

The “markets” believe this is a prelude to Russia moving troops to Ukraine. In essence, this is war. War is negative news and "markets" don't like that.?

Yesterday, the Dow fell 1.42%, the? S&P declined by 1% and the NASDAQ Composite slipped 1.2%.?

MOEX the Russian stock market index fell by 2.52%.?

The indexes measure the average performance of stocks.?

Russia is a key producer of crude oil and a key supplier of gas to parts of Europe. There are fears that Russia could play hardball with crude oil and gas. That has moved oil futures to $95. Oil futures are contracts in which you agree to exchange an amount of oil at a set price on a set date.

You, you and you.

How does this affect Sule in Niger? Bimbo in Isale Eko? Chike in Owerri??

Stock prices will tumble a bit. If? Russia escalates things. Growth stocks will be hit even harder.?

Higher oil prices mean more money coming in for the Nigerian government and ironically more money going out due to higher subsidy payments.?

Russia is a key exporter of wheat. If wheat prices go up, that means the cost of flour goes up. Ultimately that may mean higher prices for bread and other products

All this adds to the volatility expected when the US increases interest rates (that's an equally long write-up but we dealt with that in our paid community). Fasten your seat belts and stay tight. While these issues will lead to ups and downs, what matters are the fundamentals of what you invest in? Is that stock or company or investment still making a profit or on the path to doing so.

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