When we published our discussion of Ukraine on Monday morning, we did not expect to be sending a quick note two days later. Here’s the link to Monday morning’s discussion about the Russia-Ukraine history and war.
“Ukraine: What Happens Next?” | Kotok Report,
https://kotokreport.com/ukraine-what-happens-next/
We have permission from Academy Securities to share their research missive for Tuesday, August 19. I recommend reading the entire piece.
“Academy SITREP – Trump Meets with Zelensky and European Leaders,”
https://academysecurities.com/geopolitical-insights/academy-sitrep-trump-meets-with-zelensky-and-european-leaders/
I will extract a quote from one of Academy’s distinguished military observers, General Robert Walsh.
Wars end when both sides no longer see value in continuing the carnage and are willing to quit the destruction. Putin is not there yet and sees benefits in continuing. It will take intense pressure by President Trump and the Europeans to change his calculus and bring him to serious negotiations that lead to Russian concessions. Putin’s meeting with Trump in Alaska was another delaying action to a ceasefire or a final peace settlement. He has been on this path to stall a final peace solution with the Trump administration since the first phone call with Trump on February 12. His ultimate objective is to make Ukraine a Russian client state and short of this, enable future Russian attacks that pull Ukraine into Russia’s sphere of influence. He will use the current negotiations to delay and buy time for his ongoing ground offensives and air attacks on Ukraine’s infrastructure and population. He wants to break Ukraine or set himself up for a stronger negotiating position. He is pressing his battlefield advantage during this negotiating window to make further territorial gains until Trump cracks down with tariffs and sanctions that makes the pain so difficult that he must seriously negotiate an end to the war. After Alaska, it does not appear that he has any near-term intent to change his objectives. Alaska must be looked at as a start to serious negotiations and not a failure by Trump. Negotiators must meet to find a solution, and Friday was a start by Putin and Trump meeting face-to-face. Trump left the meeting and said that Putin does not want a ceasefire, but instead is only willing to negotiate a final solution. The challenge for Trump, Zelensky, and the Europeans is Putin will use this time to continue his aggression and gain a stronger negotiating position. It also appears that Putin was successful in delaying further US secondary tariffs. Trump’s secondary tariffs on India helped bring Putin to the Alaska meeting.
And here’s another expert observation, this time from Linda Weissgold, former CIA Deputy Director for Analysis:
Pundits, who are trying to label the Alaska Summit as a failure because a ceasefire was not achieved, are making a premature call. Achieving a tactical ceasefire was a long shot that seems to have been sacrificed for the strategic goal of potentially bringing Russia and Ukraine to the negotiating table. A tripartite discussion—Presidents Trump, Putin, and Zelensky—would be a significant achievement that could ultimately result in progress towards peace even without a preliminary ceasefire. While it is almost certainly correct to say that Putin believes continued fighting enhances Moscow’s position in any future negotiations, a bloody Russian push to take even more territory as quickly as possible could backfire—angering the US, hardening Ukrainian resolve and requirements for security guarantees, and energizing European allies. I agree with General Walsh that it will take intense pressure by the US and the Europeans to change President Putin’s calculus and gain concessions, but it will also take significant assurances from those same parties to get Ukraine to sign on any dotted line.
Let me thank Steve Chaires at Academy securities for rapidly granting me permission to share these observations with readers and for sharing the entire research discussion.
Kotok View
President Trump has managed to get some discussion with antagonists underway. His critics can condemn his methods. His supporters can praise them. The style is not the relevant issue. The substance is that a discussion has occurred and that a coalition seems to have also occurred with the Western alliance supporting Ukraine. Are things resolved? No. Will they be? There is no way to predict the outcome.
But no outcome can happen without some dialogue. Financial markets are focused on other topics like the Fed or tech sector concentration. Nothing has changed in the markets in terms of discounting any “peace dividend.”
That said, General Walsh has offered a prescription for change if Putin is sufficiently punished so that he comes to the table. A coalition is forming to bring that about, we hope.
We know Ukraine has suffered the harshest of punishment from Putin, and we know that Ukraine exhibits the fiercest of courage and resistance. You can find that evidence in our Monday missive sent out just two days ago.
We will know more soon enough.
