I guess the big news today is that Germany and the United States will be shipping tanks to Ukraine. I have read tactical, logistical, and strategic arguments that is a mistake.
The tactical argument is that both the Leopard and M1 are too heavy for Ukrainian bridges or pontoons so their utility will be limited. The logistical argument is that both tanks require substantial training and specialized support. It has been suggested that if the tanks are to be of any use in the near term, they will be operated and maintained by NATO forces. The strategic argument is that is a substantial escalation of the war. Stay tuned.
The Commerce Department announced 2.9% growth in GDP in the fourth quarter of 2022, faster than expected, but not all of the news is good:
The Commerce Department’s advance fourth-quarter gross domestic product report on Thursday showed half of the boost to growth came from a sharp rise in inventory held by businesses, some of which is likely unwanted.
While consumer spending maintained a solid pace of growth, a big chunk of the increase in consumption was early in the fourth quarter. Retail sales weakened sharply in November and December. Business spending on equipment contracted last quarter and is likely to remain on the backfoot as demand for goods softens.
It could be the last quarter of solid GDP growth before the lagged effects of the Federal Reserve’s fastest monetary policy tightening cycle since the 1980s are fully felt. Most economists expect a recession by the second half of the year, though a short and mild one compared to previous downturns, because of extraordinary labor market strength.
As soon as there was an agreement made to send the tanks Zelensky wanted, then he demanded jets and long range ballistic missiles! Some analysts have said the incremental escalation of the Ukrainian War, aided and abetted by our own escalating involvement, reminds them of the build-up to Viet Nam.
You missed the actual news — that US/NATO is planning to send F16’s into Ukraine.
For all those who were/are doubtful it will happen, look at this article from the Financial Times.
The money quote, “However, St John said the company was “going to be ramping production on F-16s in Greenville [South Carolina] to get to the place where we will be able to backfill pretty capably any countries that choose to do third-party transfers to help with the current conflict—.
Lockheed Martin isn’t ramping production of fighter jets unless they have confidence the end demand is there.
On pace for a general European/North American war this summer.
On GDP –
It was primarily an inventory build. Look at final sales. Not good.
Perhaps the most positive thing is that it looks closer to soft landing than crash and burn.
The fly in that ointment is the consumer is junked up on credit cards. Almost like a last gasp blowoff occurred last year. Now what? Pull in the horns? I don’t know.
But the employment numbers keep holding up. If businesses were really expecting a drop off we should be seeing those numbers worsen.
Suspect it more likely European countries send their MIGs to Ukraine and back fill with F 16s. Netherlands is phasing out F 16s and replacing with F 35s so they could be on the table.
Steve
Well, as long as we don’t get our hands dirty.
I was talking this over with some friends, mostly the ex-military bunch. We got together when one of my guys got reactivated and called back in to active duty. One of the really bizarre things about this war is that it is perfectly OK for Russia to bomb cities, deliberately hitting civilian sites, but it is forbidden for Ukraine to attack anything in Russia. We avoid selling them stuff that could be easily used against Russian sites and Ukraine avoids attacking Russian sites, even when Russian sites are being used to stage the war. Strategically, since Ukraine is fighting a defensive war and Russia one of aggression it makes some sense for the most part but the reason for keeping rail lines and staging areas in Russia as non targets makes it pretty clear this is total Russian aggression and there never was intent, even when given the opportunity, to go after Russia.
The elephant in the room of course is nukes. If Ukraine fights back on Russian soil they can use nukes. That being the case they can attack all fo their other neighbors. Makes on understand why Poland, Estonia, Finland, etc are so concerned and willing to support Ukraine.
Steve
Steve
They also all aspire to being ethnic states and have territorial aspirations. Both put them at odds with Russia.