Staggering Russian Losses; Biden May Move Soon on Student Loans

by Greg Valliere, AGF Management Ltd.

Insights and Market Perspectives

RUSSIA IS MAKING SLOW PROGRESS in the Donbas region of eastern Ukraine, but intelligence reports indicate that Moscow’s losses have been staggering — once again raising the issue of whether Vladimir Putin will seek an “exit ramp.”

THAT INCREASING LIKELIHOOD is suggested this morning by Washington Post columnist David Ignatius, who has been exceptionally plugged in during the war. So have British intelligence experts; UK Defense Secretary Ben Wallace reported the following on Monday:

ABOUT 15,000 RUSSIAN TROOPS HAVE BEEN KILLED, a high percentage of them officers, 2,000 armored vehicles have been destroyed, and 60 helicopters and jet fighters downed. Russia’s massive invasion army of 120 battalions has suffered a 25 percent loss in combat strength, Wallace said.

THIS HAS BEEN ACCOMPANIED by mysterious fires at Russian military installations and factories in recent days, according to media reports. This indicates that Ukrainian agents may be infiltrating the Russian homeland. And the Russian economy is in free fall.

AT WHAT POINT WILL PUTIN SEEK a face-saving exit? The date to watch is May 9, the anniversary of the end of World War II in Europe in 1945. Not that Putin can be believed, but he has always stated that Russia’s objective is control of the Donbas, and he could declare mission accomplished on May 9 — even though a guerrilla resistance would prevail for months or years to drive the Russians fully out of the Donbas.

WITH RUSSIAN TROOP MORALE AND SUPPLIES in question, the U.S. and NATO have changed their objective: it’s now clear that there’s enough resolve in the West to actually win this war. It’s not imminent, but Russia’s battered military must be thinking about declaring victory and going home.

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DESPERATE FOR AN ELECTION-YEAR BOMBSHELL, President Biden apparently is close to announcing sweeping student loan relief. Liberal Democrats have been urging him to act, and despite his reservations, Biden may issue an executive order soon, bypassing Congress.

IN A WHITE HOUSE MEETING YESTERDAY with Hispanic leaders, Biden indicated a willingness to forgive perhaps $10,000 in debt for middle and lower income borrowers, and he may extend the moratorium on loan paybacks past the latest deadline, on Aug. 31.

THIS WOULD INFURIATE Republicans — not to mention millions of student loan debtors who paid back every last dime. But all you need to know about this issue is that fresh polls show a sharp drop in Biden’s job approval rating among young people. They would welcome loan relief, as would the reeling Democrats.

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This post was first published at the AGF Perspectives Blog.