What Happens Next In The Ukraine War

The Man Who Predicted The Ukraine War

A short video clip that went viral after Russia invaded the Ukraine last year was the one in the tweet below, by University of Chicago Professor John Mearsheimer in 2015, predicting the war that would come seven years later. 

Professor John Mearsheimer in 2015:

"The West is leading Ukraine down the primrose path and the end result is that Ukraine is going to get wrecked" pic.twitter.com/Xquv0EDrMS

— Richard (@ricwe123) February 20, 2023

With the war heating up recently, between the much anticipated Ukrainian counteroffensive and the destruction of the Kakhovka dam, it's worth listening to what Mearsheimer said recently about the future of the conflict. 

Professor Mearsheimer gave a speech a couple of weeks ago where he assessed the current status of the war, and predicted what would happen next. David Sacks shared a summary of it on Twitter; I've watched the speech and question and answer session that followed it, and Sacks's summary is accurate. Below is the video of the speech and Q&A itself, followed by Sack's summary. Following that we'll close with a brief trading note. 

David Sacks's summary of the speech is below [emphasis and the one comment in brackets are mine]. 

 

Important recent talk by Mearsheimer on current status of Ukraine War and what’s likely to happen next. Mearsheimer is the leading scholar of International Relations, and his predictions about the conflict have been highly accurate going back a decade.

Key points:

(1) Current status:

• The Russians are winning the war. Ukraine had the upper hand in 2022 but Russia has it in 2023. The Russians have not won yet, but Mearsheimer believes they are winning and will win the war. Why?
• This is a war of attrition similar to WWI. The goal is to bleed out the other side. “This is Muhammad Ali and Joe Frazier standing toe to toe and beating the hell out of each other in the center of the ring.”
• Who wins a war of attrition? 3 factors decide: Balance of resolve. (Both sides are resolved.) (2) Population. (3) Artillery.
• Russia had a 3.5 to 1 population advantage at the beginning of the war. This has grown to about 5:1 as a result of 8+ million Ukrainian refugees, 3M of which have gone to Russia.
• Artillery is the “king of battle.” Balance of artillery is somewhere between 5:1 and 10:1 in Russia’s favor. The US doesn’t have enough artillery to give Ukraine; that’s why we’re talking about tanks and planes. “Two armies standing toe to toe trying to destroy each other with firepower.” Russia has a lot more men and artillery.
• Casualty Exchange Ratio is at least 2:1, meaning that two Ukrainians are likely dying for every Russian. The Ukrainians’ claim of 7:1 CER in their favor is ludicrous. The Russians are not doing mindless frontal assaults. Recent RUSI report shows that Russian tactics have improved.
• Ukraine pushed large numbers of troops into Bakhmut in a losing effort. Ukrainians are becoming desperate to conscript men. Russia has not fully mobilized yet.

(2) What’s likely to happen next:

• Russia will take the 4 oblasts they already annexed plus (if they can) another 4 oblasts to the Dnipro River including Odessa and Kharkiv. The goal would be to bring all the ethnic Russians under their control to avoid another “Donbas problem.”
• Russia doesn’t want to take western Ukraine (trying to conquer ethnic Ukrainians who hate them would be like “trying to swallow a porcupine”); but their goal is to turn Ukraine into a dysfunctional rump state so it can’t threaten them or be used as a Western bulwark on their border.
• There’s not going to be a peace agreement. Best case is a frozen conflict. Why? (1) the parties can’t agree on territory. (2) they can’t agree on neutrality. (3) Hyper-nationalism. Hatred on both sides makes a deal impossible. (4) No trust. Western leaders and Zelensky admitted that they had no intention of honoring the Minsk agreements and entered them just to buy time.
• George Kennan, Adm. Bill Perry, Amb. Jack Matlock, and Gen. Shalikashvili said that NATO expansion was a prescription for disaster. They were right. It’s only going to get worse. Mearsheimer hopes to be wrong about this, but this is his prediction.
• F16s won’t make a difference because it takes a long time to train good pilots. Also the Russians have very good air defense [the best in the world, according to Mearsheimer], and their own Air Force is ready to engage. Biggest risk of F16s is that Ukraine uses them to attack targets inside of Russia, creating an escalation, which could draw the US deeper into the war. — Mearsheimer believes that if the Russians are losing the war, the likelihood of nuclear use to rescue the situation is high. (The war is existential for the Russians.) But as it stands now, the odds of nuclear use are very low because the Russians are winning.

Trading Note

We've got four bearish trades teed up for companies reporting earnings after the close today and before the open tomorrow, so if you're subscribed to our trading Substack/occasional email list, keep an eye out for our trade alert. If you're not subscribed, feel free to subscribe below. 

If You Want To Stay In Touch

You follow Portfolio Armor on Twitter here, or become a free subscriber to our Substack using the link below (we're using that for our occasional emails now). You can also contact us via our website. If you want to hedge, consider using our website or our iPhone app.