Ukraine (closed; covers till August 2014)

[jmm99]

... citing a few links that caught my eye last nite and today ...

First, two articles (from yesterday) taking initial looks at "sanctions" (whatever they might end up to be) and Germany; from Spiegal OI, Economic War with Russia: A High Price for German Business:

The EU has imposed new sanctions to prevent Vladimir Putin from further escalating the crisis in Ukraine. Berlin has played a leading role in the punitive actions, despite protests from the German business community. There's no turning back for Merkel.
...
Germany has taken a leadership role in those efforts -- a role that Berlin has sought to claim for itself since the early days of the unrest in Kiev. At the beginning of the year, Foreign Minister Frank-Walter Steinmeier pledged that Germany would become more active in its foreign policy, and the current initiative is one manifestation of that aspiration.

But it is also becoming clear that those ambitions come with a price tag. Despite pressure from many European Union member states and the US, Steinmeier and Chancellor Angela Merkel initially managed to prevent swifter sanctions. They wanted to attempt to resolve the Crimean crisis through talks. The strategy ultimately failed because of Putin's intransigence.
...
In Berlin, all officials can do is guess at just how far Putin might be willing to go. Under the more optimistic assessment, the Russian president might offer a diplomatic olive branch following the annexation of Crimea to prevent a further escalation. However, high-ranking diplomats believe it is just as conceivable that Moscow might attempt to destabilize other regions like the Baltics or the Caucuses by using economic pressure or the presence of strong Russian minorities in countries in those places. It's a scenario for which the West still has no answer.

and from Motley Fool, A Sanctions War Is Bad News for Europe's Energy and Utility Majors:

As tensions between the West and Russia grow over the Crimean dispute, a series of harsh sanctions is expected to be imposed on Russia in the coming weeks. While most of the focus is on Russian government officials, it is also said to include travel bans for the well-connected CEOs of OAO Gazprom (NASDAQOTH: OGZPY) and OAO Rosneft.

Russian MPs aren't taking this lying down, and are threatening retaliatory sanctions against U.S. and European companies. The rest could well be a full-fledged sanction war, with t!t-for-tat sanctions spiralling out of control.
...
The bottom line

Neither BP nor Shell is facing a threat as near the immediacy or import as E.ON, whose very profitability might be at risk if things turn sour. BP's stock is a bargain on paper, with a P/E of around 6.5, though investors should keep a cautious eye on what happens with their Rosneft relations.

Shell's risk is even smaller, and it is well-positioned to take advantage of some other geopolitical situations, though with a price near its 52-week high, caution again is probably warranted, and panic selling on a sanctions war could provide a buying opportunity.

Gazprom remains the biggest bargain of the bunch, and even though it's the primary target of these sanctions, it is ironically in the least danger. Its gas empire is simply irreplaceable to the global economy, and with a P/E around 2 after the recent sell-off, it is just ridiculously cheap.

So, buy Gazprom !

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Moving from economics to law ... My comment, when Ashley Deeks first wrote of the Ukraine and IL and she received the "Russian" response, was "So What". In short, IL doesn't matter very much in these cases - and the Cheka law departments do a much better job of agitprop co-ordination than we USAian amateurs might even dream of doing.

One might as well simply go to the bottom tag lines - BLUF (as viewed by the US): legal and legitimate (Panama); illegal but legitimate (Kosovo); illegal and illegitimate (Crimea). But then we have this classic line from Sergei Lavrov: “If Kosovo is a special case, then Crimea is a special case; it’s just equally special.” (Youtube @ 10:00). Lest you think that I think that all of this is a bit farcical - yes, I do.

Our friend Jack Goldsmith from Lawfare appears to be leaning toward my direction, The Precedential Value of the Kosovo Non-Precedent Precedent for Crimea (by Jack Goldsmith, March 17, 2014):

What to make of all this? There are many factual differences between Kosovo and Crimea, but I find it hard to argue that Kosovo is obviously lawful while Crimea is obviously unlawful. By choosing the “illegal and illegitimate” formulation and inviting the comparison to at least the Kosovo intervention, the European bigwigs seem to agree. International law drops out because both actions were illegal, leaving only a fight over “legitimacy,” which is even more in the eye of the beholder than legality.

One might add that the question of independence turns less on the legality or legitimacy of the independence claim, and more on the interests of the nations deciding whether to recognize, which are all that matter in the end.

One might also view these events as further evidence of my (somewhat obvious) claim [JMM: I, never to miss the obvious, agreed with Jack on Syria] that “the precedential value of an action under international law cannot be established at the time of the action, but rather is determined by how the action is interpreted and used in the future.”

Or one might go further and, perhaps after a glance at the U.S. invasion of Panama (to take one of many possible examples), say that precedent (as well as non-precedent and non-precedent precedent) plays no consequential role in the use of force context. [emphasis added by JMM]

Jack's "glance" link is to DocEx's, The Yanukovych Letter: Is Russia in Ukraine Really Becoming the U.S. in Panama? (4 Mar 2014) (snip to another analysis, by Eric Posner, pretty much agreeing with me in its point 2):

There are, of course, arguments that could arguably distinguish Panama from Ukraine that I will leave others to identify. I think in both cases, Eric Posner's succinct two-point analysis on Ukraine is on point: "1. Russia's military intervention in Ukraine violates international law" (as the U.N. General Assembly found the U.S. intervention in Panama did) and "2. No one is going to do anything about it." (As no one did with Panama in 1989).

DocEx is a project by Doug Cox, a law school librarian and former intel officer - which may have what you are looking for in the small wars intel arena.

Enough lunch for now.

Regards

Mike

[Firn]

So, buy Gazprom !

Markets tend to be efficient even if from time to time they are subject to moody swings. In this case the very low P/E of Gazprom, indeed of the whole Russian stocks universe, begs the question of how much of that E does actually belong to you. That fat question mark explains much of the risk premium which Russian securities suffer...

A great thing about capitalism is that I'm not forced to buy Russian stocks, and can chose among an amazing amount of options, some of them which will hopefully give my a higher return in the long run. Much Russian capital has voted in similar fashion, fleeing from Russia to find a home in the West.