Little Hope for Ukraine Breakthrough; New Covid Controversy in the U.S.

by Greg Valliere, AGF Management Ltd.

Insights and Market Perspectives

WISHFUL THINKING: Staggering Russian losses in recent weeks apparently will not dissuade Vladimir Putin, who is likely to boast today of progress in the Donbas region while rejecting any serious talks toward a settlement.

NEWS AGENCIES ARE REPORTING this morning that the traditional May 9 military parade celebrating the defeat of Nazi Germany in 1945 will be far less impressive than in recent years.

THE REASON, SIMPLY, IS THAT RUSSIA HAS FEWER tanks, helicopters and other weapons — and has suffered well over 20,000 fatalities, with thousands more wounded or captured. Still another Russian general was killed last week; perhaps a dozen have perished as the war slogs on in the east.

WITH WESTERN COUNTRIES pouring weapons and financial aid into Ukraine, an imminent settlement seems very unlikely. Volodymyr Zelensky wants to win; he announced this past weekend that his peace terms would include a return to pre-war borders, a non-starter for Putin, who is content to bomb civilians indiscriminately.

THUS THE WAR is likely to last until Russia runs out of conscripts and weapons, with a threat that Putin could declare war and call up even more bewildered reservists. Young men are leaving the country in droves.

RUSSIA WILL EVENTUALLY CAPTURE WHAT’S LEFT OF Mariupol, while the Ukrainians are making progress near Kharkiv. Our bottom line has not changed since February — Russia cannot win this war by any conventional concept of winning; Putin continues to grossly miscalculate Russia’s staggering military and economic losses.

* * * * *
JUST WHEN IT SEEMED THAT the Covid pandemic was in the rear-view mirror, two new controversies have erupted in Washington. One involves a budding dispute between Anthony Fauci and the new White House Covid coordinator, Ashish Jha; the other focuses on an incredible estimate of potential new cases this winter.

FAUCI RAISED EYEBROWS LATE LAST WEEK when he criticized the more relaxed climate in Washington, where 2,500 attended the White House Correspondents dinner; several notable attendees have subsequently contracted Covid.

FAUCI DID NOT ATTEND THE DINNER, but Jha did, noting that participants were required to be fully vaccinated and recently tested. In an off-the-record phone call that was reported by Politico and others, Fauci expressed frustration with the sanguine message that the dinner sent.

JHA’s MORE UPBEAT MESSAGE seems to contradict the Biden Administration’s call for a $22.5 billion spending package for more vaccines and Covid aid; funding for both may run out later this year. Without more aid, the White House says, there could be upwards of 100 million new Covid cases this winter, a shockingly alarmist figure that many experts reject.




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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