On Friday, the market soared for some inexplicable reason or perhaps very explicable if one assumes the market is now exclusively populated by kneejerk-reacting idiots and busted vacuum tubes that don't even bother to read what is written below the headlines, when Russia confirmed the end of a military drill that previously had been scheduled publicly would end precisely on that day!
As we said "This is in no way a de-escalation - in fact, had Russia continued the exercise that would have been a clear provocation. But as usual Johnny 5 ignites momentum first, finds out he never actually read between the original lines, and asks questions never." Sadly, the "market" took this as news, or merely as justification, to send stocks soaring on upward Fed-facilitated momentum, and to halt what otherwise would have been the S&P's downward descent into the 1800s at this moment.
As we further said yesterday, it was only a matter of time before Russia announced yet another drill just to show to the west that it is by no means telegraphing any weakness through the timing of drills.
We were about 12 hours early, because later that same day, Itar-Tass reported that some 3,000 paratroopers will be airlifted in two districts of Russia’s north-western Pskov region as part of command and staff exercises of the 76th air assault division starting on Monday, Airborne Force spokeswoman, Major Irina Kruglova said. As a reminder, Pskov is located right next to the Baltics, bordering Estonia and Latvia, both of which have been on a rather belligerent diplomatic track with the Kremlin, and thus will likely result in a substantial escalation in Russia-Baltic tensions, not to mention Ukraine as well, now that Putin is no longer counter-un-de-escalating, again.
But back to the latest, greatest, and certainly not last drill, “over 3,000 personnel will be airlifted by 15 Il-76 planes,” the spokeswoman said.
The punchline: The mass landing of paratroopers in an unknown terrain will be held for the first time in military drills of this level, the spokeswoman said.
As long as the surprise terrain is not "Kiev"...
Bad jokes aside, the maneuvers will involve over 30 aircraft and helicopters, including Su-34 fighter-bombers, Ka-52, Mi-28, Mi-24 and Mi-8 helicopters. “The drills’ active phase will take place on August 14-15", the spokeswoman said.
The maneuvers will end with night and daylight firing from all of the division’s organic weapons, including Sprut self-propelled anti-tank guns and Nona-self-propelled mortar systems, as well as Strela-10 air defense missile systems.
So while markets certainly do not care today, when the drill is being announced, be certain sure to buy everything with both hands and feet on August 15, when the mass media announces the end of the drill which will be "spun" as yet another assured, guaranteed demonstration of Putin de-escalating military tensions in the region.
At least until the next week that is.