The Chinese Zhurong Martian rover recently found evidence of salty liquid water droplets that indicate it may have had snow and frost as recently as 400,000 years ago.
To put that into perspective, scientists believe that Homo sapiens evolved around 300,000 years ago, meaning our earliest modern ancestors might have walked at the same time that water was flowing on Mars.
Though calculations have previously demonstrated that conditions for water are possible on Mars today, this is the first occasion in which evidence of liquid water has been found on our neighboring planet.
The study team found important morphological features on the dune surfaces such as crusts, cracks, granulation, polygonal ridges, and a strip-like trace. Salts in these dunes, which are estimated to be between 0.4 and 1.4 million years old, cause frost or snow to melt at low temperatures to form salty liquid water.
“We inferred that these dune surface characteristics were related to the involvement of liquid saline water formed by the subsequent melting of frost/snow falling on the salt-containing dune surfaces,” said Qin Xiaoguang, a geophysicist at the Chinese Academy of Sciences and first author of the new study.
The discovery was hailed by the IGG team as providing key observational evidence of liquid water at Martian low latitudes, where surface temperatures are relatively warmer and more suitable for life than at high latitudes.
The Zhurong rover, which is part of China’s Tianwen-1 Mars exploration mission, landed on Mars in 2021 at a landing site at the southern edge of the Utopia Planitia plain—the largest impact basin in our solar system.
It was the first time that a spacefaring nation’s inaugural mission to Mars contained an orbiter, lander, and rover, and all three succeeded in deployment.
Currently, Zhurong has yet to wake up from hibernation during the Martian winter, and the scientists believe that a layer of dust has coated the solar panels and prevented it from recharging—a common fate for Martian equipment, including most recently NASA’s Insight Lander.
“This is important for understanding the evolutionary history of the Martian climate, looking for a habitable environment and providing key clues for the future search for life,” said Dr. Qin.
Robert Francis Kennedy Jr., son of former Attorney General Bob Kennedy and nephew of President John Fritzgerald Kennedy, is running against incumbent Joe Biden for the Democratic Party’s 2024 presidential nomination.
Trump is currently beating Biden in the polls.
Robert Kennedy Jr. is an environmental lawyer, notably winning a groundbreaking lawsuit against Monsanto. He spearheaded a science-based indictment against Dr. Anthony Fauci and the pharmaceutical industry during the Covid pandemic [1].
Like Bernie Sanders in 2020, this left-wing figure, who has consistently stood up against the leaders of the woke Democratic Party, is trying to take it over the way that Jacksonian Donald Trump took over the Republican Party. The battle cry of Kennedy’s campaign will be the struggle against the corruption of institutions and against the power of transnational corporations.
He embodies a non-sectarian left, turned towards the Common Good.
In July 2021, Robert Kennedy Jr. participated in the ReAwaken America Tour, described by the press as a far-right Christian movement. He was photographed alongside General Michael Flynn and electoral strategist Roger Stone.
Republican Roger Stone, who participated in the campaigns of Richard Nixon, Ronald Reagan, George W. Bush, and led that of Donald Trump, assures us that, whatever the differences between Trump and Kennedy (especially on weapons and abortion), a national unity candidacy of the two men would offer a solution in response to the country’s division and go a long way to preserving the integrity of the United States. For his part, Steve Bannon encouraged Robert Kennedy to throw his hat in the ring.
A recently published meta-analysis shows that global sperm counts are declining worldwide—at an accelerating rate.
The article, published in the journal Human Reproduction Update in November by an international team of researchers, who reviewed 2,936 scholarly abstracts and 868 full articles, analyzed data from 38 sperm count studies done on six continents, updating their landmark study of 2017. The study is based on semen samples collected from 1973 to 2018.
The 2017 study found sperm counts had fallen in North America, Europe, and Australia by over 50 percent in a fifty-year span. The current study updated this data as well as added data from South/Central America, Asia, and Africa.
“The aim of this study was to examine trends in sperm count among men from all continents. The broader implications of a global decline in sperm count, the knowledge gaps left unfilled by our prior analysis, and the controversies surrounding this issue warranted an up-to-date meta-analysis,” said the authors.
The analysis found that while sperm counts had declined at the average rate per year of 1.16 percent between 1972 and 2000, the rate of decline since 2000 has increased to an average of 2.64 percent per year. The new 2022 study updates an earlier 2017 study to cover a broader geographic area and include new studies. Its analysis reveals a significant drop in sperm count. (Temporal trends in sperm count: a systematic review and meta-regression analysis of samples collected globally in the 20th and 21st centuries/Oxford Academic) Reviewing the findings in an After Skool YouTube episode, study author Shanna Swan said:
“Now we can conclude that among men who didn’t know what their fertility [rate] was, who are, by the way, most representative of the general population, that there was a significant decline [in sperm counts and sperm concentration] in Asia, Africa, and South America—so now we can say that our finding of a significant decline in sperm concentration and count is worldwide—that was a big change from the 2017 paper.
“The other change from the 2017 paper was the rate at which sperm counts are declining: When we look at recent years—particularly since the turn of the century—the rate is 2.64 per year. That’s more than double 1.16, the prior finding.”
The Role of Plastics in Reproductive Disruption
The obvious question is—why the accelerated rate of decline?
Swan dismissed genetic explanations, pointing out that genetic changes take “many generations to appear” whereas these changes are taking place in two generations or less.
“That leaves us with environment,” Swan said.
Swan and other experts believe the problem is a class of chemicals called endocrine disruptors, which interfere with the body’s hormones.
These endocrine disruptors are found in many everyday products, including plastic bottles and containers, liners of metal food cans, detergents, flame retardants, food, toys, receipts from ATMs, and pesticides.
Phthalates, commonly found in personal care products, plastics, and children’s toys are one common class of these compounds. They’re hard for consumers to avoid, particularly since manufacturers are under no obligation to identify these chemical ingredients.
Also, many of these disruptors are slow to break down in the environment, making them a long-term hazard.
One particular area of concern for researchers is reproduction, as these disruptors can interfere with fetal maturation and sexual differentiation in early pregnancy.
In the video, Swan illustrates the process whereby these disruptors can short-circuit testosterone production in the male fetus as it goes through development:
“So, here’s the whole picture. There’s the male fetus developing around the first couple weeks of the first trimester: The genetic signal is for the testicles to develop and start making testosterone and here comes this foreign influence from phthalates telling the body, well, you don’t need to make as much testosterone [because] we got it covered as they occupy the spaces … of the androgen receptors, the testosterone receptors.”
“They sit there and they say: Okay we’re good here—you don’t need to make any more [testosterone]. So the body says: Okay—it won’t make any more … and the boy will be under-masculinized.” Robin Bernhoft, M.D., past president of the American Academy of Environmental Medicine, told the Epoch Times that plastics are part of a larger picture of toxins impacting reproduction throughout the biosphere:
“The proliferation of estrogenic chemicals is a major concern. Research has shown that 80 percent of male trout in Colorado had intersex genitalia, a high percentage of male crocodiles in Florida lack penises, and so forth. This is happening on many levels: Direct toxicity from PCBs, direct estrogenic effects from plastics, pesticides, and mercury among other toxins—but also a secondary effect—the stimulation of aromatase, a hormone which then converts testosterone to estrogen independently of the other factors. Pollution in general … stimulates aromatase which then converts available testosterone to estrogen. It is quite scary.”
Criticism of Sperm Count Analysis
The 2017 study by Swan and her colleagues was criticized in an article published in the journal Human Fertility in May 2021 by researchers at Harvard’s GenderSci Lab. The article did not conduct its own detailed meta-analysis of sperm studies but criticized the assumptions and conclusions of the original research.
“The extraordinary biological claims of the meta-analysis of sperm count trends and the public attention it continues to garner, raised questions for the GenderSci Lab, which specializes in analyzing bias and hype in the sciences of sex, gender, and reproduction, and in the intersectional study of race, gender, and science,” Sarah S. Richardson, director of the GenderSci Lab, and a professor of the history of science and studies of women, gender, and sexuality at Harvard University told the Harvard Gazette.
The authors argue that rather than concluding the results support a “Sperm Count Decline” hypothesis, they propose “the Sperm Count Biovariability” (SCB) hypothesis:
“SCB asserts that sperm count varies within a wide range, much of which can be considered non-pathological and species-typical. Knowledge about the relationship between individual and population sperm count and life-historical and ecological [i.e., regional] factors is critical to interpreting trends in average sperm counts and their relationships to health and fertility.”
However, the meta-analysis of Swan and her colleagues did not deny the range of variations in individual sperm counts but examined declining overall averages spanning more than a half-century. How such a precipitous overall average decline across all groups can be explained by individual variation based on life-historical factors or regional variation is unclear.
The Health Consequences of Low Sperm Count
In contrast to the GenderSci Lab’s science-as-culture analysis, a study in Italy conducted by endocrinologists found that low sperm count was associated with metabolic alterations, cardiovascular risk, and low bone mass, according to the lead author Alberto Ferlin, an M.D., and associate professor of endocrinology at the University of Brescia.
“Infertile men are likely to have important co-existing health problems or risk factors that can impair quality of life and shorten their lives,” said Ferlin, who is also president of the Italian Society of Andrology and Sexual Medicine. “Fertility evaluation gives men the unique opportunity for health assessment and disease prevention.”
Specifically, Ferlin and his colleagues found that about half the men had low sperm counts and were 1.2 times more likely than those with normal sperm counts to have greater body fat (bigger waistline and higher body mass index; higher blood pressure (systolic, or top reading), “bad” (LDL) cholesterol and triglycerides; and lower “good” (HDL) cholesterol.
Low sperm count was defined as less than 39 million per ejaculate, a value also used in the United States. All the men in the study had a sperm analysis as part of a comprehensive health evaluation in the university’s fertility clinic, which included measurement of their reproductive hormones and metabolic parameters.
They also had a higher frequency of metabolic syndrome, a cluster of these and other metabolic risk factors that increase the chance of developing diabetes, heart disease, and stroke, the investigators reported. A measure of insulin resistance, another problem that can lead to diabetes, also was higher in men with low sperm counts.
Vladimir Putin met with Gennady Zyuganov, leader of the Russian Federation Communist Party faction in the State Duma as announced by Kremlin.ru. What does it mean?
President of Russia Vladimir Putin: Mr Zyuganov, it has been a while since we agreed to sit down and discuss the current situation and our interaction.
Tell me, the 30th anniversary of the creation of the Communist Party is today or tomorrow?
Leader of the Communist Party Gennady Zyuganov: The 2nd Extraordinary Restoration Congress began 30 years ago today. The ruling was handed down by the Constitutional Court, where we sat for hearings for eight months. I must give it to Mr Zorkin [Constitutional Court Chairman], he did not cave in, even though the pressure was overwhelming.
Vladimir Putin: To ban the party?
Gennady Zyuganov: They wanted to close down everyone.
Importantly, when we made it clear that almost everyone starting from Georgy Zhukov and Mikhail Sholokhov were communists, and this organisation cannot be outlawed without upsetting the balance… There were only two people on the Constitutional Court who were not CPSU members, but they still handed down that ruling. We, including myself, made proper preparations.
Tomorrow will mark 30 years since I was elected. All told, you have someone with vast political experience sitting in front of you.
Vladimir Putin: I am aware of that.
Mr Zyuganov, happy anniversary to you and your party members. Congratulations to you on tomorrow’s election anniversary.
I hope as a force representing a significant part of the country’s patriotic movement, the Communist Party will remain such going forward. The party makes a substantial contribution to the political discussion and the quest for the best solutions to move the country forward in the social sphere, the economy, defence and security – we have never had any differences on that level, I think. On the contrary, the Communist Party was often one step ahead and raised national security issues of today and tomorrow with authorities at all levels. Without a doubt, our dialogue is now doubly or even triply important.
I am pleased to see you.
Gennady Zyuganov: Thank you, Mr President.
It should be said that you have always been receptive to our requests, proposals, and legislative initiatives. In this regard, we value our dialogue, especially now that, in fact, a crusade and a new war have been declared on our civilisation and the entire Russian world.
Social cohesion, mobilisation of all forces, parties, and movements…What matters most now is the “party of Russia,” its sovereignty, independence and our common freedom. The entire left-wing patriotic bloc that I head – 56 organisations in all – is standing behind it strongly as one. We have done much for Donbass, with the 105th humanitarian convoy about to leave soon. We have sent 17,000 tonnes of cargo, we provide regular help, and welcomed 12,000 children to Russia.
You supported Iosif Kobzon and us when we were founding the Children of Russia to Children of Donbass movement. We will welcome 2,000 more children to Snegiri this year.
By the way, engaging with children, schoolchildren and educators is extremely important, since children were brainwashed en masse by filthy Nazi propaganda. In two weeks, more children will come, and we will show them Red Square, the Kremlin, the Exhibition of Achievements of the National Economy, places of military glory, and the Cathedral of Christ the Saviour. They are new people by the time they go back. Your instruction to the governors, regions, universities, schools, and vocational schools was important. They invite and welcome the children, giving rise to good and friendly relations without which it is impossible to bring life back to normal.
I believe the fight against Nazis today has taken on a fateful significance. I worked for 20 years at the Council of Europe and I never thought that Europe could become so submissive to the Americans who have become completely brazen of late. But, I hope, we must win – and we will win.
Vladimir Putin: That is the way it is going to be. Thank you.
State Department Deputy Assistant Secretary of State for Iraq, Iran, and Public Diplomacy Jen Gavito speaks at the Atlantic Council, Oct. 25, 2022. (Al Arabiya English)
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by Joseph Haboush, Al Arabiya English
A senior US diplomat said Tuesday that Washington was not disengaging from the Middle East, refusing to leave a vacuum for Beijing, Moscow or Tehran to exploit.
“We will not walk away from the Middle East and leave a vacuum to be filled by China, Russia or Iran. America’s interests are interwoven with the successes of the Middle East,” said Jen Gavito, the State Department’s Deputy Assistant Secretary of State for Iraq, Iran, and Public Diplomacy.
Speaking at an event on Iraq at the Atlantic Council, Gavito said the US understands that Iran is “a very important partner” for Baghdad.
“But they should be positive in both directions. Persistent threats and attacks from Iran-aligned militia groups undermine Iraqi sovereignty and erode public trust in the government,” she added.
Pro-Iran militias can’t claim to be part of the security apparatuses in Iraq and be unfettered by the state’s authority and chain of command, Gavito said. “They’re either in, or they’re out.”
Iran has promised to expel US forces and diplomats from Iraq and the region. They have also, directly and indirectly, attacked American troops in Iraq and elsewhere.
But Gavito doubled down on previous commitments by US President Joe Biden to deter and counter Iran’s destabilizing activities in the region.
She also touched on the ongoing anti-government protests across Iran, which were sparked by the death in police custody of 22-year-old Mahsa Amini.
“We will always stand with the Iranian people striving for the basic rights and dignity long denied them by the regime in Tehran,” Gavito said.
Iran-Russia alliance, China
Turning to the Russian war on Ukraine, Gavito lamented Tehran’s military support for Moscow and commended Iraq’s vote at the United Nations to condemn Russia’s illegal annexation of Ukrainian territories.
“We’re concerned with the deepening Russia-Iran alliance, as evidenced by recent deliveries of Iranian UAVs that Russia has used to destroy civilian infrastructure in Ukraine,” the US diplomat said.
As for China and its bid to exert influence in the Middle East, Gavito warned that Beijing was seeking to remake the international order and its “profoundly illiberal” image.
Nevertheless, the US understands that Iraq could look to advance its development goals with China. “However, we encourage Iraq to do so with its eyes wide open,” she said, pointing to economic arrangements with China that only benefit Beijing.
Another reason Iraq should be cautious, according to Gavito, is that China has made little to no contributions to the fight against ISIS as the terrorist group continues to try to revive itself.
As Russia, China and Iran seek to exploit Iraq’s political, religious and ethnic divisions, Washington remains committed to Baghdad.
“I am here to tell you that we are not going anywhere. It is in our interest to work with the Iraqi people to confront these shared challenges I’ve described,” Gavito said.
With the largest nuclear fleet in the world (93 nuclear reactors with an installed capacity of 95 GW, generating 20 % of US electricity), the US has almost completely lost its uranium mining. The US imports 95 % of its uranium.
At the same time, the US is heavily dependent on Russia for uranium, comparable to Europe and gas: every seventh tonne burned in US reactors comes from Russia. Moreover, 28% of uranium enrichment services for US electricity generation are provided by Russia’s Rosatom. The dependence is critical, to say the least. The United States will not be able to replace that capacity, either in ores or enrichment, even within a few years. And it is a great resource for Russian counter-sanctions, if the government really wanted to impose them. The same “uranium for roubles” at Sberbank would solve the bank’s problems with all the sanctions.
WASHINGTON, D.C.—In a tense press conference Monday, Press Secretary Jen Psaki faced pointed questions about several Biden misstatements that led to chaos during his trip overseas. Psaki quickly reassured the gathered press that Biden doesn’t speak for the President of the United States.
“The President has clearly said, and we agree, that Joe Biden does not speak for this administration,” said Psaki to the confused reporters. “Nothing said by Biden should be misconstrued to reflect the official foreign policy of the President. This administration has been clear from the beginning, that we have always been clear about what we have been clear about, clearly.”
“But Jen!” said a feisty Peter Doocy, “Don’t you think these inconsistent statements could cause World War III and unleash CRT on our kids all at once? Why did Biden have to walk back his statements?”
“We would like to walk back the statement that we have ever walked back any statements,” said a frustrated Psaki. “But if you find any statements that we have walked back let me know and we’ll circle back later to walk back our walk-back.”
Sources say Biden is now in his basement on tranquilizers until the administration can clarify what statements need to be walked back.
The European Union has decided to impose economic sanctions on its two member states, Poland and Hungary, even as the two countries deal with the influx of over 1.5 Million Ukrainian refugees in the last 2 weeks. European Parliament voted overwhelmingly in favour of these sanctions on Poland and Hungary in the middle of the unfolding humanitarian crisis.
In a press release, European Parliament stated that it was high time for the Commission to protect the EU budget from violations of rule of law. It also mentions that EU funds must be protected from countries that undermine the EU’s “liberal democratic values”. As per European Union laws introduced in January 2021, EU member countries that bend the rule of law are not eligible to receive funds from the EU.
478 MEP (Members of European Parliament) voted in favour of these sanctions, while 155 voted against.
“EU laws are above national laws, even above the constitution of respective member states”
In October 2021, Poland’s top court had rejected the supremacy of EU laws over some judicial matters. A constitutional tribunal in Poland had stated that some EU treaty articles were incompatible with Poland’s constitution.
The European Commission had taken major objection to the Poland top court’s ruling and had stated, “EU law has primacy over national law, including constitutional provisions. All rulings by the European Court of Justice are binding on all member states’ authorities, including national courts.”
As per European Union, Poland and Hungary are not respecting these common EU laws, and are accused of curbing the freedom of courts, media and academics. In addition, they are accused of depriving LGBTQ+ people and migrants of their rights. The two countries had appealed against these European laws in the European Court of Justice but their plea was dismissed in February earlier this year.
With Billions of Euros at stake, this decision is bad news for both Poland and Hungary, particularly for Hungarian Prime Minister Viktor Orban who faces an election next month.
While the timing of this decision is just a coincidence, since the process was in the works since last year, still the decision to rob these countries of funds in the middle of a refugee crisis has been met with widespread derision. During the ongoing war in Ukraine, Poland has taken close to 1.5 million refugees, while Hungary has received nearly a quarter of a million refugees.
EU is unravelling – it is a generator of negative economic growth and declining shares of global trade. Merkel once pointed out it had 6% global population and 25% global welfare spending – nowhere else on earth does the Unskilled live so well.
It is unravelling fast and stupid politicians with their literature degrees or law studies fail to comprehend GDP growth correlates inversely with energy input prices.
“….Being in a hotel, I have the opportunity to waste my time watching CNN. I am truly fascinated by how completely clueless the so-called experts, generals, politicians, that they have on are about this. They have no understanding of the Russian motives, they have no conception of what is actually going on, and they can’t see what is in front of their faces. My personal favourite is the US senator that says Russia is running out of food because it’s a communist country and therefore needs to conquer more agricultural land. This is a man whose office is bigger than your house, has a staff of dozens with a huge budget and that’s what he thinks is going on…”.
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“Many people don’t realize the biggest risk during global nuclear war is actually COVID.”
We re-tooled our manufacturing line from oversized bras to iodine-soaked leather masks.
We were going to use a nylon-rayon mixture but one of our investors is a huge Judas Priest fan.
Black leather, white leather, brown leather, “lets you breath while you survive the fallout from the fallout” iodine soaked so your thyroid gets over-supplied with iodine.
It’s the radioactive iodine getting into your thyroid gland that gets ya.
COVID can survive on an irradiated surface for almost a year.
COVID can also be carried by gamma rays.
This is why Putin wants to nuke everyone.
— CNN
A nice nuclear apocalypse would bring tranquility to everyone, including the crazies.
“What about the heat? And the shock wave?”
Only a flesh wound.
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The bottom line is that while Russia’s economy will likely be crippled and soon, once this final dollar lifeline stops, the removal of millions of barrels of oil from the market will lead to an exponential surge in oil prices until we hit the infamous “demand destruction” trigger – the price beyond which there is no more demand… and a global stagflation beckons.
In short, this is one giant game of chicken between Russia and the west, where the former is suffering tremendous pain this very moment, and where the latter is still cruising thanks to a buffer of relatively cheap oil which however will run out shortly and once it does, prices will go vertical triggering an even bigger oil crisis than what the US experienced in the mid-1970s.
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The Russians have had EIGHT YEARS, since the USA/Ukraine illegal war crime coup in 2014, to prepare for these western sanctions and Global actions against her.
The idea that any Western action, NOW, is going to be a long term problem for Russia is absurd. They have gamed every Western move possible ad infinitum.
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Russia is a big wheat producer/exporter and of course one of the largest energy producers, they have everything needed to survive – heat and food. They are used to live with little at times of difficulty.
At the same time they are taking over the second largest country in Europe with plenty of resources too, so f- sanctions.
And the most important thing – they are liberating the ethnic Russians in southern Ukraine.
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How many more days until the Russians cutoff all natural gas exports to countries which are sanctioning them?
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According to US polling firm Morning Consult, 34% of Americans who participated in their poll were able to locate Ukraine on a map.
“When asked to find Ukraine on a blank map of Europe, only about 1 in 3 voters correctly located the country, slightly more than the 28 percent who were able to identify Iran on a map roughly two years ago in the wake of a U.S. strike on the Islamic Republic’s most powerful commander.”
They did however do better finding Russia.. Bigger I suppose.
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The ultimate effect of “modern” education is to dumb down the people and get them to think only in terms of black and white binaries – “Four legs, good; two legs, bad”. Since the war began, I see headlines everywhere: “Ukraine war – what you need to know”. The blasted reporter tells us what I need to know, not what I want to know. “You need to know only what we allow you to know”. No wonder we have geniuses in positions of power who cannot understand what constitutes Russia’s core national interests. Putin has jolted the world back to some common sense, destroyed the Covid scamdemic and brought back realism back into international relations.
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A decision by RF to halt energy exports to adversary nations would have severe economic impact and greatly curtail the ability of importing nations to wage war. The 1973 Arab Oil Embargo drove crude prices up by 300%. See: https://en.wikipedia.org/wiki/1973_oil_crisis
Meanwhile #Putin’s approval rating has raised from 60% to 71% (survey by FOM)
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Here is the list of countries who both voted to censure Russia in the UNGA and have enacted sanctions.
Australia, Austria, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Poland, Portugal, Romania, Singapore, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Kingdom, United States
Total of 30
Here is the list of countries that voted to censure Russia in the UNGA but have not joined the sanctions regime
Argentina, Bosnia and Herzegovina, Brazil, Brunei, Cambodia, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Georgia, Guatemala, Haiti, Honduras, Hungary, Indonesia, Israel, Malaysia, Mexico, Myanmar, Panama, Paraguay, Peru, Philippines, Qatar, Saudi Arabia, Serbia, Thailand, Turkey, United Arab Emirates, Uruguay
Troops on the Donbass front in Ukraine. Photo via RWA Podcast.
What’s Next In The War
Likely, the fall of Kiev. Our Russian correspondent Anatoly Karlin, who successfully predicted the invasion when most thought it was a bluff, recently suggested Kiev might fall this weekend.
Why U.S. Markets Bounced After The Invasion
In our February 16th post, we suggested investors hedge; ZeroHedge suggested on Friday that investors hedging beforehand led to the U.S. markets bounce after the war started. That may be part of the reason for the bounce, but we suspect another is what didn’t happen, or at least hasn’t happened yet.
Russia’s invasion didn’t lead to war with NATO, and the West hasn’t so far resorted to nuclear-level sanctions against Russia, such as removing it from SWIFT or boycotting its energy exports. In fact, as Javier Blas reported on Thursday, Europe was set to buy Russian gas piped through Ukraine on Friday.
The Risks That Remain
The risks that remain are big though, so we suggest investors take advantage of the bounce and add downside protection if they haven’t already. The biggest risk is that the current war escalates to one between NATO and Russia. One possible way that could happen is if Russian aircraft inadvertently violate NATO airspace.
Another possibility is hawks in the U.S. succeed in getting NATO to implement a no-fly zone over Ukraine.
Recall that the West has implemented no-fly zones in the past against Libya and Iraq, but these were third world countries with negligible air forces or air defense capabilities. Russia, in contrast, has a well-equipped air force and air defense artillery.
Another risk that remains is that sanctions imposed against Russia become more severe, leading to reciprocal sanctions and metastasizing economic disruptions. We saw a small taste of that this past week, when Russia responded the UK’s ban on Aeroflot flights landing there by banning British airlines from flying over Russia, closing them off from profitable great circle routes to Asia.
Similarly, if calls to exclude Russia from SWIFT succeed, that could lead to unintended consequences, such as Russia partnering with China on a competing system, which might lead to a weakening of U.S. dollar hegemony.
The best case scenario for investors (and, more importantly, for limiting human suffering) remains a quick end to the war, but on Friday, the U.S. State Department opposed ceasefire negotiations between Russia and Ukraine.
Possible Opportunities
There are potential opportunities in some beaten-down Russian stocks now. In our personal account, we bought shares of two of them on Thursday and Friday: Yandex (YNDX) and Gazprom (OGZPY). Just to clarify: neither of those stocks were Portfolio Armor picks. For an idea of the sort of names Portfolio Armor has picked recently, these were its top ten names last month: Screen capture via Portfolio Armor on 1/27/2022.
And here’s how they’ve done since, versus the SPDR S&P 500 ETF (SPY):
Portfolio Armor tends to pick stocks that have been going up recently, such as the current winner from the January 27th cohort, the oil E&P Antero Resources Corp (AR); Yandex and Gazprom both dropped significantly (along with the rest of the Russian market) after the invasion started. But while investors in U.S. stocks may be underrating the risks of the war, investors in Russian stocks may have overrated them. Yandex is essentially the Google (GOOG) of Russia, with 92% of its revenues coming from inside Russia.
As such, foreign sanctions would seem to have limited impact on it.
Gazprom of course sells plenty of gas to Western Europe, so it could be vulnerable to sanctions more severe than those that the West has currently imposed. But Germany’s dependence or Russian gas makes those sanctions unlikely.
And as of Friday’s close, contra data you’ll find on some popular financial sites, Gazprom’s forward dividend yield was about 22%.
One additional risk there, however, is that a Russian politician has mooted freezing dividends for residents of countries sanctioning Russia.
His proposal only mentioned bank stocks, but it’s possible if that were implemented it could be extended to non-financial stocks such as Gazprom.
The Zhurong rover – credit CNSA
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