Month: February 2022

Via AgMetalMiner,

• Renewable energy has taken center stage in the global fight against climate change.

• The energy crisis in Europe has highlighted some of the challenges the world is facing in the global energy transition.

• It is becoming increasingly clear that fossil fuels will remain a key part of the energy mix for years to come. 

In 2018, a pair of us on the MetalMiner team attended the “premier aluminum conference in Europe” — Aluminum 2018 Dusseldorf. Although Dusseldorf felt like a charming Ohio blue collar town with good beer, one of us left the event with a deep cough (obviously pre-Covid). Oddly enough, the weather alert app kept displaying daily ozone levels in the “high” or “extremely high” range. As a puzzled American, one of us appeared confused and the other, thankfully knowledgeable. The cough comes down to the type of energy now used in Germany, coal. MetalMiner’s European colleague quickly explained that after the Japanese Fukushima nuclear disaster, Germany implemented a plan to shut down its entire nuclear operations no later than 2022.  

In hindsight, that decision by Germany appears both foolish and ironic.

Foolish because Germany has lost its negotiating power (pun intended) with Russia for which it relies. 

It’s ironic because the country already had “clean energy” but now must turn back to dirty energy to avoid blackouts.

In the meantime, while the world watches the Russian invasion and also the impact of sanctions, (we’ll venture a guess that they will have minimal impact), the MetalMiner analyst team discussed Europe’s energy situation and the impact on various metals markets.

On stability of the electric power grid in Europe

Have you ever stood in a field and felt a constant breeze for hours with no interruption at all? Well, we haven’t either. However, if you think wind comes and goes how about relationships with other countries like Russia?  Perhaps one can conclude that renewables serve best as supplemental energy sources, certainly not primary sources. When Texas needed to fly helicopters with jet fuel derived from oil to thaw out windmills, clearly the grid did not perform as planned. This begs the question: will the move to green energy continue and will it pull up metals prices needed to support green energy initiatives? If the trend does not continue, one might expect a sharp reversal for several metals. 

Evidence that the US power grid has weakened

Home and commercial generator manufacturer Generac has seen a big uptick in home generator sales according to this recent article. Heck, even one of our analysts recently purchased a natural gas generator from Generac to shore up a weaker local power grid. And CEO Aaron Jagdfeld confirmed rising sales in Russia and Ukraine by stating, “we’re seeing interest in Russia and Ukraine which arguably might be related to some of the security concerns short term.”  

To us, this represents a sure sign that people know the grid appears unsustainable. The green narrative centers around climate change as the root cause of more severe weather but the other factor relates to the unreliability of green energy and power companies have failed to make the investments in backup energy sources needed to support wind and solar. Green energy goes down far more often than either nuclear or coal plants.

From an alternative investment standpoint, the lack of energy independence, the lack of sunshine or wind at times will help spur other energy spin-off companies such as generator companies (by the way the home generator lead time for this editor stands at 5 months). Another spin-off will include diesel vehicles produced with mobile generators to charge cars after they run out of charges on highways. 

Energy independence equals negotiation leverage

Does energy independence create autonomy? Germany and the rest of Europe may have the opportunity to discover that answer now. Energy of course drives the overall economy literally fuels productivity. In supplier negotiations, the easiest way to control the process involves gaining leverage. And thus the easiest way a country can gain leverage involves the control of its energy. We now see this throughout Europe and to a lesser extent, the United States right now. The US placed sanctions on Russia but failed to address the oil they sell us. In this respect, the US has lost negotiation leverage. By ceding our own energy autonomy, the US becomes beholden to despots like Putin. Moreover, Russia can choose both to cripple the US as well as the timing. 

Oil prices, commodity markets and underlying metal prices

Oil prices have no immediate cap. Prior to the invasion, rising demand already provided price support. By shutting down American production, the US gave up its control over the oil price. As a net exporter of oil, the US also supplied the world market. Thus the US had a role with both supply and demand. Second, any time oil prices surged, the US could enter the market with more supply and thus help control prices. Moreover, as the only non-OPEC producer, the US had some control over global oil prices. 

Although oil prices make up some 30% of the CRB index, a rising oil price might not carry over to industrial metals. Nor does it apply to the price of individual exchange-traded metals (e.g. aluminum, copper, nickel etc). The one-two combination of rising oil prices combined with steep inflation will likely depress demand for goods and services. Ordinarily, a rising oil price tends to signal rising demand and often, a healthy economy. Today, just the opposite may occur.

A page from 2008 – 2016

Perhaps part of the strategy involves driving up oil prices, to help hasten the switch to green energy and technologies. And in time, perhaps that transition will occur. In the meantime, most of those technologies do not generate a strong ROI — either for the consumer or for businesses. And with a Russian invasion of Ukraine, perhaps it’s time for a rethink.

The “Oracle of Omaha” Warren Buffett published his 57th annual letter to Berkshire Hathaway shareholders on Saturday, and in it he proclaimed that Apple – which Berkshire finally bought in 2016, overcoming its decades-long aversion to consumer tech – had become one of “our four giants” responsible for the firm’s continuing prosperity.

The firm recorded more than $90 billion in net earnings during 2021, with nearly $40 billion of those coming during Q4 alone.

Buffett used the “giants” theme to great effect in his latest letter. And while he praised Apple at No. 2, much of Berkshire’s success is due to the company’s No. 1 “giant”, its “cluster of insurance operations”, which includes GEICO, MedPro, National Indemnity, etc., and generates a massive cash “float” that is now worth more than $147 billion.

Nevertheless, operations of our “Big Four” companies account for a very large chunk of Berkshire’s value. Leading this list is our cluster of insurers. Berkshire effectively owns 100% of this group, whose massive float value we earlier described. The invested assets of these insurers are further enlarged by the extraordinary amount of capital we invest to back up their promises.

The insurance business is made to order for Berkshire. The product will never be obsolete, and sales volume will generally increase along with both economic growth and inflation. Also, integrity and capital will forever be important. Our company can and will behave well.

There are, of course, other insurers with excellent business models and prospects. Replication of Berkshire’s operation, however, would be almost impossible.

But at No. 2, Apple has performed tremendously, and Buffett credited CEO Tim Cook for protecting the company’s dominant position as one of the world’s most valuable enterprises. Apple also paid Berkshire $785 million in dividends last year alone:

Apple – our runner-up Giant as measured by its yearend market value – is a different sort of holding. Here, our ownership is a mere 5.55%, up from 5.39% a year earlier. That increase sounds like small potatoes. But consider that each 0.1% of Apple’s 2021 earnings amounted to $100 million. We spent no Berkshire funds to gain our accretion. Apple’s repurchases did the job.

It’s important to understand that only dividends from Apple are counted in the GAAP earnings Berkshire reports – and last year, Apple paid us $785 million of those. Yet our “share” of Apple’s earnings amounted to a staggering $5.6 billion. Much of what the company retained was used to repurchase Apple shares, an act we applaud. Tim Cook, Apple’s brilliant CEO, quite properly regards users of Apple products as his first love, but all of his other constituencies benefit from Tim’s managerial touch as well.

Giants No. 3 and No. 4 were Berkshire’s freight rail business, BNSF…

BNSF, our third Giant, continues to be the number one artery of American commerce, which makes it an indispensable asset for America as well as for Berkshire. If the many essential products BNSF carries were instead hauled by truck, America’s carbon emissions would soar.

Your railroad had record earnings of $6 billion in 2021. Here, it should be noted, we are talking about the old-fashioned sort of earnings that we favor: a figure calculated after interest, taxes, depreciation, amortization and all forms of compensation. (Our definition suggests a warning: Deceptive “adjustments” to earnings – to use a polite description – have become both more frequent and more fanciful as stocks have risen. Speaking less politely, I would say that bull markets breed bloviated bull . . ..)

BNSF trains traveled 143 million miles last year and carried 535 million tons of cargo. Both accomplishments far exceed those of any other American carrier. You can be proud of your railroad.

…and BHE, Berkshire’s energy business.

BHE, our final Giant, earned a record $4 billion in 2021. That’s up more than 30-fold from the $122 million earned in 2000, the year that Berkshire first purchased a BHE stake. Now, Berkshire owns 91.1% of the company.

BHE’s record of societal accomplishment is as remarkable as its financial performance. The company had no wind or solar generation in 2000. It was then regarded simply as a relatively new and minor participant in the huge electric utility industry. Subsequently, under David Sokol’s and Greg Abel’s leadership, BHE has become a utility powerhouse (no groaning, please) and a leading force in wind, solar and transmission throughout much of the United States.

Here are some other key points outlined in the letter.

Berkshire’s cash position:

Berkshire’s balance sheet includes $144 billion of cash and cash equivalents (excluding the holdings of BNSF and BHE). Of this sum, $120 billion is held in U.S. Treasury bills, all maturing in less than a year. That stake leaves Berkshire financing about 1⁄2 of 1% of the publicly-held national debt.

Charlie and I have pledged that Berkshire (along with our subsidiaries other than BNSF and BHE) will always hold more than $30 billion of cash and equivalents. We want your company to be financially impregnable and never dependent on the kindness of strangers (or even that of friends). Both of us like to sleep soundly, and we want our creditors, insurance claimants and you to do so as well.

Taxes:

Every year, your company makes substantial federal income tax payments. In 2021, for example, we paid $3.3 billion while the U.S. Treasury reported total corporate income-tax receipts of $402 billion. Additionally, Berkshire pays substantial state and foreign taxes. “I gave at the office” is an unassailable assertion when made by Berkshire shareholders.

Berkshire’s history vividly illustrates the invisible and often unrecognized financial partnership between government and American businesses. Our tale begins early in 1955, when Berkshire Fine Spinning and Hathaway Manufacturing agreed to merge their businesses. In their requests for shareholder approval, these venerable New England textile companies expressed high hopes for the combination.

The Hathaway solicitation, for example, assured its shareholders that “The combination of the resources and managements will result in one of the strongest and most efficient organizations in the textile industry.” That upbeat view was endorsed by the company’s advisor, Lehman Brothers (yes, that Lehman Brothers). I’m sure it was a joyous day in both Fall River (Berkshire) and New Bedford (Hathaway) when the union was consummated. After the bands stopped playing and the bankers went home, however, the shareholders reaped a disaster.

In the nine years following the merger, Berkshire’s owners watched the company’s net worth crater from $51.4 million to $22.1 million. In part, this decline was caused by stock repurchases, ill-advised dividends and plant shutdowns. But nine years of effort by many thousands of employees delivered an operating loss as well. Berkshire’s struggles were not unusual: The New England textile industry had silently entered an extended and non-reversible death march.

During the nine post-merger years, the U.S. Treasury suffered as well from Berkshire’s troubles. All told, the company paid the government only $337,359 in income tax during that period – a pathetic $100 per day.

As far as profits were concerned, 2021 was a blockbuster year for Buffett and Berkshire. The firm’s shares managed to outperform the S&P 500, booking a 29.6% gain, compared with 28.7% for the S&P 500 (with dividends included). That’s a much better showing than the prior year (2020), where Berkshire shares notched a gain of just 2.4%, compared with more than 18% for the S&P 500 (again, with dividends).

Berkshire’s Q4 net earnings increased to $39.65 billion, or $26,690 per Class A share equivalent, up from $35.84 billion, or $23,015 per share, during Q4 2020. Operating earnings, which exclude some investment results, rose to $7.29 billion from $5 billion a year before. Net earnings increased 11% due to gains from Berkshire’s investment portfolio.

2021 was a quiet year for Berkshire in terms of deal flow: no major acquisitions were announced, although the firm remained an active buyer of its own shares, spending $51.7 billion on repurchases over the past two years. As of Feb. 23, Berkshire had spent another $1.2 billion on buybacks this year, as Buffett again insisted that the firm’s appetite for its own shares will remain “price dependent”.

As for the firm’s annual meeting, that will begin Friday April 29 and continue through May 1.

Readers can find the full letter below:

2021ltr on Scribd

Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

Up until February 23rd, 2022, the powerful countries of the world played a very rarified game.

Too many people try to analyze geopolitics like it is a game of chess.

Move, counter-move. Push a pawn? Threaten a knight, that type of thing. It’s easy to understand and makes for good copy.

In the past I’ve tried to liken it to a multi-player version of Go, with anywhere from four to 6 different colored stones on the board trying to take territory. It was a better metaphor but nearly impossible to describe adequately. In fact, at times, it was exhausting.

The reality is that neither of these metaphors are explanatory.

Because the only accurate model for geopolitics is actually Calvinball.

You know that game. That’s the one from Calvin & Hobbes.

Contrary to your memory of the legendary comic strip, there were rules to Calvinball that went something like this. Calvin got to make the rules up as he went along.

In geopolitics it pretty much comes down to whoever the strongest player got that power.

Here’s the thing. Up until Russia’s invasion of Ukraine (and yes, it is an invasion, justifiable or otherwise) there was something called the ‘rules-based order’ promoted by mainly the US but also supported directly by the European Union and the Commonwealth.

The rules of the ‘rules-based order’ were simple. We make the rules, you follow them. We reserve the right to change the rules whenever we want to suit our purpose.

It was the geopolitical equivalent of Sam Francis’ idea of ‘anarcho-tyranny,’ which boils down to, “rules for thee, but not for me.”

We’ve heard the Russian diplomats complain about this for years. Why have these rules if they are not ever enforced?

As I point out all the time when talking about leftist ideologues purity spiraling towards self-destruction, we have these rules because only others’ hypocrisy counts. Sub-humans are not allowed to talk or even be a part of the conversation.

And in the world of diplomacy as practiced by the collective West, the Russians are definitely sub-human, just like the unvaxxed and now anyone to the immediate right of Karl Marx and isn’t a furry.

All that changed when Russian tanks crossed the border, stand off missiles hit anti-aircraft and artillery batteries, and marines came onshore in Ukraine.

For months we’ve been treated to the dumbest and most infuriating facsimile of diplomacy I’ve ever witnessed. It beggared belief listening to the nauseating virtue signaling of US ‘diplomats’ who refused to engage Russia’s concerns in even a half-serious manner while blaming them for every issue on the planet.

It was as clumsy as it was stupid, to quote Darth Vader.

It was clear that Putin and his staff would be given this ultimate option, invade Ukraine and face global opprobrium or kneel before Zod.

Their miscalculation was in thinking that Russia actually cares one whit about that global opprobrium at this point. By their actions in Ukraine this week, it is clear they are not.

They weren’t afraid of NATO’s posturing, Biden’s threats of sanctions or of Liz Truss’s difficulties with basic geography. The longer this standoff over Ukraine went on the more it was clear that most of the people in positions of power and their support staff have less than zero understanding of the parameters of their jobs.

Because of this their constant invocation of the ‘rules-based order’ rang more and more hollow since they were simply acting like a precocious six-year old boy playing with his stuffed tiger.

Pronouncements of consequences and ‘sanctions from hell’ and threats of holding our breath until we pass out were rightly ignored by Putin and his staff.

For decades NATO enjoyed the luxury, thanks to US military primacy, of making up the rules and forcing everyone else to react to them.

It goes back to the statement, most likely made by then Vice-President Dick Cheney, on the ‘reality-based community,’

“That’s not the way the world really works anymore … We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors…and you, all of you, will be left to just study what we do’“

What’s been clear to me is that those placed in positions of power by Klaus Schwab and the rest of The Davos Crowd they still think we live in this type of world. That no matter what the people want or other countries need, they will dictate the time, place and parameters for any and all confrontations.

However, the longer this went on the more it was clear that Putin and his foreign minister, Sergei Lavrov, were inching towards that moment where they would change the rules. I wrote back in March 2018 that Putin’s State of the Union address where he unveiled new weapon systems was a major turning point.

For the next four years we have seen a steady escalation of neoconservative insanity in a vane attempt to push US missile systems closer to Moscow, contra to all signed international agreements, UN resolutions about resolving the breakaway republics of Ukraine and, frankly, common decency.

After a 2021 where things in Ukraine kept getting hotter and hotter, Putin and Lavrov, having backed Biden down over the summer with June 16th’s summit, knew the time had come to change the rules of the game.

If they didn’t Russia would cease to be.

The old game entered its spiral towards conclusion when Russia sent and published publicly its draft proposals for a new security architecture concerning Russia and NATO’s relationship in Eastern Europe.

Russia acted, setting the operational tempo from that moment forward. It forced the US and Europe to react to them as they created a new reality, set new rules.

The US was now the rule-taker rather than the rule-maker. You knew this because it prompted multiple rounds of scurrying to Moscow by officials from all over the West trying to talk the Russians off their new game.

To zero avail.

As The Saker pointed out in his initial thoughts on Russia’s recognition of the breakaway republics of the Donbass, this operation in Ukraine was a long time in the planning. This was not an action that was taken lightly.

Again, I will repeat here what I wrote above: this recognition should NOT, repeat, NOT, be seen in isolation. It is just ONE PHASE in a PROCESS which began at least a year ago, or more, and there is much more to come.

Truer words and all that.

For months I’ve been telling you that Nordstream 2 would eventually be turned on and that Russia would not be kicked out of the SWIFT telecommunications network regardless of what happened.

The former is still on the table, as Germany was the most vocal about not doing the latter.

Even I missed that Russia was planning to change the game this radically, thinking there was always a Davos-approved solution which didn’t involve extensive use of the Russian military, but still ended with the US looking foolish.

In retrospect, it was obvious we were always headed to this end-game because Russia saw the opportunity to change the rules.

Less than a day after Russia wiped out both Ukraine’s military power and political architecture, President Sundowner confirmed that all the West’s threats were as empty as the heads of the Millennials running the propaganda desk at the State Dept.

After months of threatening Russia with expulsion from the SWIFT financial messaging system, Europe complained and someone finally showed some sense.

Cutting Russia out of SWIFT would mean the end of the EU as anyone has known it or wishes it could be in the future. It would mean the end of the petrodollar system.

Russia is too systemically important to the global commodity trade that goes far beyond energy. It supplies not only the marginal barrel of oil and BTU of natural gas, but pound of nickel, palladium, titanium, enriched uranium and tungsten. It’s a major supplier of ammonium nitrate fertilizer, potash, and urea.

Do this and Europe not only freezes to death with their three days of gas reserves but starves once the global food supply is disrupted. Do this and Biden enters the mid-terms with $8/gallon gas, and 20% real inflation.

The Fed raising rates will be the least of anyone’s worries.

Russia held all the cards in the negotiations over Ukraine and we recklessly pursued a policy of insults and amateurish propaganda, refusing to believe Russia wouldn’t make her final stand.

By putting boots on the ground, planes in the air and missiles up the ass of every Ukrainian military installation across the country, Russia turned the ‘might makes right’ argument of the US and Europe on its head.

The game has changed because the rules have changed. It’s no longer a game of rhetorical chicken and virtue signaling.

Realpolitik doesn’t matter a bit when missiles are in the air. This is the point that was lost on so many in the professional commentariat for the past few months. They’ve never contemplated the idea that someone could do this, no less did it.

They are now confused and angry, working through their ‘cope’ in public. If it wasn’t so pathetic it would almost be hilarious.

For nearly a decade the West poured billions into Ukraine to arm it and prepare it for this week. Those billions were essentially wiped out in a matter of hours. It took a day to expose all of NATO’s posturing as nothing but that, posturing.

We now have to come to terms with this new game. It’s a game where the rules will be far more equitable because the unthinkable alternatives are no longer theoretical, they are real.

It’s real because the threats to Russia posed by NATO’s designs on Ukraine were always real no matter what was said.

So Biden and Davos got the war in Ukraine they’ve been begging Russia for. The problem for them now is Russia isn’t playing their game anymore and they are wholly unprepared for the next one.

*  *  *

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Ukrainian President Volodymyr Zelensky has remained defiant as his forces still control Kiev over past multiple hours of explosions and fighting on the outskirts of the capital city. “The fate of Ukraine is being decided now,” he had said in a prior social media address. “Special attention is on Kyiv — we should not lose the capital. The enemy will use all the possible forces they have to break our resistance. They will be mean and hard. Tonight they will begin a full scale storm.”

“I’m here,” he later said in a Saturday morning post standing near the presidential office in Kiev. Kyiv Mayor Vitali Klitschko also on Saturday said that while the “night was difficult” it remains “there are no Russian troops in the capital” – though many parts are now looking like a war zone. Zelensky followed up by saying that Ukraine has “derailed” Russia’s attack plan.

#Kiev: Literally a war zone. pic.twitter.com/HgFU3zwpjc

— Ragıp Soylu (@ragipsoylu) February 26, 2022

“The enemy is trying to break into the city,” Klitschko said, after local officials confirmed at least 35 injured as of 6am local time. And Foreign Minister Dmytro Kuleba referenced “horrific Russian rocket strikes” while explaining in a social media statement that the “Last time our capital experienced anything like this was in 1941 when it was attacked by Nazi Germany. Ukraine defeated that evil and will defeat this one. Stop Putin. Isolate Russia. Severe all ties. Kick Russia out of everywhere.”

The Pentagon has said that Russia now has mechanized forces which were sent via Belarus within 20 miles of Kiev, according to Defense Secretary Lloyd Austin who earlier briefed lawmakers. The US has continued vowing to send more weapons in support of Ukraine national forces. 

Russia’s Defense Ministry is currently disputing that it targeted a residential building in Kiev. The attack on the apartment building has been widely reported within the last hours also as shocking video and photographs emerge showing a chunk of multiple floors having been blown out.

A residential building has been hit in Kiev. Looks bad pic.twitter.com/KNOm8TfK40

— Ragıp Soylu (@ragipsoylu) February 26, 2022

According to Fox News:

The Russian Ministry of Defense has denied reports that one of its missiles struck a residential building in Kyiv, claiming the damage was caused by a Ukrainian anti-aircraft projectile, Russian state news agencies reported on Saturday, citing a source at the ministry.

“The information disseminated on social networks about a Russian missile attack on a residential building on Lobanovsky Avenue in Kyiv is not true,” the defense ministry source said, according to TASS and RIA Novosti. “The nature of the damage to the house indicates that an anti-aircraft missile hit it. This is clearly visible on the video.”

On Friday there was a showdown in the United Nations Security Council. Russia of course vetoed a formal denunciation of the invasion of Ukraine. The real surprise, however, came when the countries of China, India, and the United Arab Emirates abstained from the vote, with the remaining 11 council members voting in favor. 

#Sumy: I think this is the first documented use of Molotov cocktail used on Russian equipment in #Ukraine.pic.twitter.com/bkeEpgWmu5

— marqs (@MarQs__) February 26, 2022

Though details or confirmation have remained unclear in the ongoing ‘fog of war’ which makes verification difficult, on Friday Ukrainian forces said they downed a Russian transport plane carrying paratroopers…

🇺🇦⚡️🇷🇺 General Staff of #Ukraine army said they downed a Russian Il-76 transport plane with paratroopers in the Vasilkov area pic.twitter.com/2W7cch3yF6

— Ali Özkök (@Ozkok_A) February 25, 2022

China, India, and UAE represent an outsized chunk of the global economy and their abstention strongly suggests that it won’t be so easy to gain global adherence to a strong Washington and EU-led sanctions regimen. 

Meanwhile, the Friday assault on Kiev may have been even more severe, but it’s since emerged that Putin ordered a pause on the Russian military advance pending negotiations. Moscow then said it resumed the assault as “Kiev refused the talks” – a narrative which is being disputed by Kiev. 

Civilians in the capital, Kiev, take up arms to defend their country#Ukraine #UkraineUnderAttack #Russia #UkraineRussiaWar pic.twitter.com/LegDKRWziz

— UKRAINIAN WAR (@ukrainainwar) February 26, 2022

Kremlin spokesman Peskov said, “Yesterday, in the light of pending talks with the Ukrainian leadership, the commander-in-chief, the president of Russia, ordered a suspension of the advance of the main group of Russian armed forces in Ukraine.”

The US State Department said on Friday that it’s been directly reaching out to every American inside Ukraine that it can possibly contact. This after the US Embassy in past weeks had issued dire alerts that they should make plans to leave – however, which angered Ukraine officials themselves on up to President Zelensky, given the government consistently said there’s no real threat of large-scale invastion.

White House Press Secretary Jen Psaki confirmed in fresh statements that the US has “been in touch from the State Department with every American we can reach.”

While laying out a “range of ways” that Washington plans to help stranded US nationals – of which there’s believed to be 20,000 to 30,000 there before the start of hostilities – Psaki stuck by prior administration statements that there will be no evacuation inside the country.

“We continue to have the capacity to… help them in a range of ways, even as we don’t have a diplomatic presence in Ukraine,” Psaki said. “We don’t have people in the country right now, obviously, but they are in neighboring countries.”

This includes Poland, where US military members were deployed earlier this month to set up border area logistics to help receive fleeing Americans. 

Psaki stressed in her Friday comments that the administration has been “warning for months now about the dire circumstances developing in Ukraine, and conveying very directly to American citizens they should leave.” 

Meanwhile there are reports that private US-based organizations are helping in evacuation efforts inside Ukraine, even as official US channels are not active inside.

“Americans in Ukraine are being evacuated out of the war-ravaged nation by a Florida-based nonprofit group as Russian forces target Kyiv, officials said,” The New York Post details of one example. “More than 30 Americans had been safely evacuated out of Ukraine’s capital as of early Friday by the Tampa-based Project Dynamo, a spokesman for the group confirmed to The Post.”

By Ven Ram, Bloomberg Markets Live analyst and reporter,

The search for havens in the face of the invasion of Ukraine may lead to the usual suspects, but some assets and structures may be decidedly better than others.

The yen, for instance, hasn’t advanced since the attacks began and, if anything, is a touch weaker. Gold has been supported for sure. However, it’s now trading at a pretty rich premium (vs $1,745 on my model) — meaning those getting into it now are paying up a high entry hurdle. Those trades may be predicated on the conflict escalating materially, a topic not within the ambit of discussion of this piece.

The dollar has gone rip-roaringly higher, but at least it’s got fundamentals also working in its favor. The greenback has tailwinds from the outlook for the euro. The European Central Bank is likely to be more circumspect than the Fed when it comes to raising rates this year because of the conflict — especially if it proves to be protracted. Neither is the Bank of Japan in any hurry to tinker with its policy yet, putting the dollar on a good footing against two currencies that dominate the DXY Index weighting.

Still, the most effective haven may be options on EUR/CHF. While spot franc has advanced this week, its gains haven’t been exactly dramatic.

Against that backdrop, low-delta put options on EUR/CHF may deliver a greater bang for one’s buck should the conflict escalate, worsen or be protracted. Investors who see limited risk from the conflict may still hedge their positions using option structures like seagulls, which may offer a satisfactory risk-reward proposition.