Biden Gets a Life Preserver; Olympics May Delay Ukraine Conflict

by Greg Valliere, AGF Management Ltd.

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Insights and Market Perspectives

Author: Greg Valliere

January 27, 2022

JOE BIDEN GETS A BREAK: plunging in the polls, facing a huge loss in the fall elections, President Biden caught a break yesterday as Supreme Court Justice Stephen Breyer gave the embattled president a chance to shift the focus away from inflation, urban crime and Covid.

THE PROSPECT OF A CONFIRMATION FIGHT electrified Washington yesterday, but this may not be a brawl. The Democrats — even Sens. Joe Manchin and Kyrsten Sinema — are likely to unify behind an African-American woman. All 50 Senate Democrats are likely to vote for Biden’s nominee; Kamala Harris could have the tie-breaking vote (Harris is a long-shot to be the Supreme Court nominee, which could rid Biden of an unimpressive vice president).

LISTS OF LIKELY NOMINEES immediately circulated through Washington; we’re watching J. Michelle Childs, the South Carolina federal judge who has enthusiastic support from Rep. James Clyburn, who jump-started Biden’s presidential campaign in 2020. Regardless of Biden’s pick, she should motivate the party’s base (but, of course, a clearly liberal nominee could motivate the GOP base).

THE UPCOMING BATTLE won’t lead to a political nuclear war because the court’s ideological mix won’t change. The real excitement will come when Clarence Thomas resigns.

* * * * *
THE WINTER OLYMPICS will begin in Beijing on Feb. 4 and end on Feb. 20. Chinese President Xi Jinping has gone to extraordinary lengths to crush Covid and ensure a success, but there’s one thing that could diminish the happy headlines he’s seeking: a Russian invasion of Ukraine.

XI AND VLADIMIR PUTIN seem to be enjoying a bromance recently, as their countries move closer (Putin plans to attend some of the Olympics). We think the two leaders have an understanding that Putin will not invade Ukraine until after the Olympics (if then).

THUS IT’S POSSIBLE THAT U.S. and Russian negotiators will have another month to talk — plenty of time to offer packages of carrots and sticks. This crisis could percolate for months, without a full-fledged Russian invasion. Putin will resume cyberwarfare after the Olympics, and he may incite proxies everywhere from the Ukrainian border to the Persian Gulf to South America.

WITHOUT FIRING A SHOT, Putin has already achieved a goal: dividing the U.S., as Donald Trump’s base asks why America should get involved with far-away Ukraine. And this gives the GOP right wing an opportunity to contend that Joe Biden’s son Hunter has a stake in defending Ukraine.

PUTIN ALSO HAS EXPOSED A DIVIDE between much of NATO and Germany, and he has implicitly threatened European energy security. If cyberwarfare can keep Europe on edge, why invade Ukraine? The former KGB agent has plenty of high cards to play, but he probably knows that an invasion would be a miscalculation that could inflame Russian dissidents back home.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

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This post was first published at the AGF Perspectives Blog.

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