The question...
Is there an asset class more tenuously tethered to the real world than NFTs?
Talking Points
- Russia invaded Ukraine, sparking Europe's worst war in years
- Britain targeted cashed-up Russian oligarchs in London
- Volkswagen laid the groundwork to spin off Porsche
- Epstein associate Jean-Luc Brunel was found dead in a Paris cell
- A Pakistani tycoon's son was sentenced to death in a shocking murder
- Tonga was finally reconnected to the internet after twin disasters
- Trump's 'China Initiative' was ended by the Department of Justice
- True believers flocked to the former president's Truth Social app
- Facebook was found to miss half the climate denialism on its platform
- Carl Icahn went after McDonald's over pig welfare
Dive deeper
The Russian Federation has invaded neighbouring Ukraine on three fronts in a brash reassertion of power. Hundreds have died in the initial assault and millions are being uprooted right now.
Europe at war
Overnight on Wednesday the United Nations Security Council met to find an unlikely path to deescalate the crisis on Ukraine's border. The patter of diplomacy — cajoles and threats — became more desperate and less effective as the night wore on. As video emerged of Vladimir Putin announcing a "special military operation" in the Donbas, the mood was likely that of a sepulchre . Ukraine's delegate brandished the transcript of Putin's speech at his Russian colleague (who happened to be chairing the meeting), warning him, "There is no purgatory for war criminals. They go straight to hell". The meeting was adjourned. But the Ukrainian night had already been illuminated by rocket fire and explosions.
It was a daunting display of Russian firepower — a concentration of violence not seen since the second Gulf War. Cruise missiles lanced over the horizon and slammed into fixed positions, munitions stockpiles, and anti-aircraft batteries. The Ministry of Defence in Kyiv was hit, as were aerodromes from east to west. The line of control in Donbas erupted in gunfire. In those frantic early hours, nothing was certain — reports flooded in of paratroopers dropping onto Kyiv's international airports and an amphibious assault on Odessa. As dawn broke, these last two were proven untrue, but the reality of invasion had arrived. Cities along the Azov coast had been shelled ferociously, as had Kharkiv in the north-east.
The intensity of the assault on Kharkiv provided a clear indication of the disposition of the defences there. All night Russian missile artillery shrieked like banshees; peppering the city limits. But skirmishes broke out as soon as the advance began. Footage showed Kharkiv's ring-road littered with Russian armoured vehicles; dozens of lives blotted out by anti-tank guided missiles. These portable missile launchers are extremely effective in the open wintery expanses of eastern Ukraine. But the defenders cannot expect any tanks of their own to enter the fray. With something close to total air superiority, Ukraine's armour is devastatingly vulnerable: images captured in passing show an entire column of Ukrainian tanks smouldering on a highway in Sumy Oblast. Mesmerising clips show Russian attack helicopters as they banked and wheeled over the Dnieper; dropping chaff to scramble incoming projectiles before plunging into battle.
These are early days, but the situation appears dire. Yesterday news broke that Russian and Belarusian soldiers had wrested control of Chernobyl despite a stout defence. Attacks southward from Kharkiv and northward from Crimea could cut off the entire Ukrainian Operational Command East and the Donbas frontline. In an extraordinary piece of live journalism — and a potent sign of how quickly the situation has devolved — an American film crew rushed to Antonov airport on the outskirts of Kyiv on reports that a Russian attack had been repelled. On arrival, they discovered that the Ukranian soldiers in control of the airport were in fact Russian special forces in Ukranian uniforms who had seized the landing strip. It bodes poorly for the defence of the capital : it is nigh impossible to hold a defensive line when your opponents can just parachute behind it.
Realpolitik bites
Martial law has been declared and military-aged men are banned from leaving Ukraine. As the east of the country collapses under the weight of three Russian offensives, the beleaguered nation is steeling itself for guerrilla resistance . Once the frontline moves from trenches to apartment blocks it necessarily follows that civilian casualties will rise exponentially. Resist or not, Kyiv is expected to fall in the next few days. Volodymyr Zelensky is no longer calling the shots. As to what happens next, we must wait and see. A great many of us have been left with egg on our faces as we've tried to divine Putin's intentions. On this point, we ought to acknowledge that the US intelligence apparatus was bang on the money this time (Cassandra's curse or the Boy Who Cried Wolf?).
The punishment for Europe's first major ground war since the disintegration of Yugoslavia has been a significant raft of sanctions targeting Russian individuals and banks. The harsh restrictions on SberBank and VTB will affect half of the country's banking assets. Gazprom, Gazprom Neft, and TransNeft can no longer access Western capital to run Russia's vast gas export business. Price shocks will be sure to ripple around the world. Nord Stream 2 is dead for now. But for all that, the evidence that sanctions are an effective deterrent is, in polite terms, extremely light. Russia has isolated itself ; but its $631bn in foreign reserves and in-house SWIFT-clone will help it ride out the worst of the sanctions .
Leaked intelligence from the apparatus in Maryland and Virginia tells another story too: of the US accepting the calculus that Putin's actions had hinted at, notwithstanding the lack of justification for the assault. Yes, Ukraine has had a chequered history of national socialism, but that's hardly grounds for "de-Nazification". And yes, the region bent the knee toward Moscow historically, but that was always contingent, not given. Even the notion of defensive necessity precipitated by Ukraine's mooted NATO membership is shallow. NATO was never going to admit Ukraine while a territorial dispute festered in the Donbas. All these reasons fray at the slightest tug. What is left is a stark exercise of power. Ukraine lies within Russia's sphere of influence whether it wants to, or not. And the West never really brought Ukraine into its fold.
There is something paltry, if not outright distasteful, about landmarks across the globe being illuminated in the vibrant blue and yellow of the Ukrainian flag. It is international solidarity reduced to performance art, while people are cooked alive inside their armoured vehicles on lonely roads. We've been shaken from the dream of a democratic rules-based order.
Worldlywise
Safer than your mattress
‘The pretext of protecting financial privacy is merely a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders.’
So justified the whistle-blower who leaked the data of more than 18,000 bank accounts connected to Switzerland’s second biggest bank, Credit Suisse . The international journalistic investigation, dubbed ‘Suisse Secrets’, disclosed that $100bn of dirty money was held within these accounts at the peak. Somewhat predictably, the leaks named a rogue’s gallery of depositors — billionaires, oligarchs, kleptocrats, and drug-dealers. One senior advisor to U.K. charity, Tax Justice Network, noted wryly that the Swiss reputation for reliably secretive banking was so renowned, it had become a byword for money-laundering. Shameful as all this is, the whistle-blower stressed that the responsibility for making sure one's client isn’t an attorney for a corrupt Filipino dictator doesn't lie with the Swiss banks, ‘but rather the Swiss legal system’. Business, we're led to believe, is just busines; the problem is institutional.
Credit Suisse, strongly rejecting the claims and refusing to comment on any specifics relating to the matter, offered an inelegant parry by making the point that the accusations were ‘historical’. If you flip back far enough through the history books, you’ll find that Adolf Jöhr — Credit Suisse’s managing director in 1932 — was instrumental in pressuring Swiss law makers to ensure that violating banking privacy be made ‘punishable at [the] penal level’. Two years (and one national banking crisis) later, Switzerland’s Federal Act on Banks and Savings Banks was born. And its reputation as the most private place to bank was cemented. Credit Suisse may be correct that federal policy drives banking sector regulation, but even if deficiencies in regulation are to blame for Switzerland’s reputation as a haven for illicit cash, don’t forget that regulation is also the product of lobbying by bankers. An ouroboros of finger-pointing.
Despite international efforts to hold the bank to account, the domestic response has been muted. The European Commission is reportedly mulling re-classifying Switzerland as a high-risk country for financial crime, and Credit Suisse has reiterated its policies and procedures for ensuring tax compliance and avoiding money laundering.
A fourth-quarter loss of 2 billion Swiss francs ($2.2 billion) and a 1.9% drop in share price has sent a gust through the sector, but it seems for now the fig leaf is still firmly in place.
Birds defecate on scientists
You may be one of the smartest scientists on the planet, but nature can still find a way to make you feel like it’s time to go back to undergrad. A team of Australian scientists were left feeling silly this week when a group of magpies foiled their mission to equip each bird with a GPS tracker “backpack”. The effort was an attempt to learn more about the birds' movement and social behaviours. But just as scientists fitted the final device, an adult female magpie was seen removing the backpack from a younger comrade. Within hours, almost all the tracking devices were gone. “The birds outsmarted us,” study author Dominique Potvin said.
The backpacks were designed to be tough, and hard to reach, meaning the birds had to find the one weak point in the device (under the bird’s breast) that allowed it to be removed. Magpies are known to be smart, but this episode has vaulted them to a new level. What’s more, the story also shows their capacity for altruism. “This behaviour demonstrates both cooperation and a moderate level of problem solving, providing potential further evidence of the cognitive abilities of this species,” researchers said.
This was also one of the first documented cases of “rescue” behaviour among birds, where one member of a species helps free another in distress. “We never considered the magpies may perceive the tracker as some kind of parasite that requires removal,” Dr Potvin said. Rescue behaviour has been documented in others species , but rarely birds.
The best of times
Colombia decriminalises abortion
In an unalloyed victory for human rights and women's health, the Constitutional Court in Bogotá ruled 5-4 in favour of decriminalising abortions up to 24 weeks. Brilliant.
Your neolithic surgeon will see you now
Spanish archaelogists have discovered what they believe to be the earliest example of surgery - on a 5,300-year-old skull. The patient in question had two bilateral perforations made on both mastoid bones (delicate bones behind the ear which contain air). Today we call this procedure a mastoidectomy, and it is used to relieve pain from inflammation. We're going to need to rethink those stone age jokes.
The worst of times
Height of luxury; bottom of the ocean
There are luxury cars worth $400m on fire off the coast of the Azores right now. The car transport vessel Felicity Ace was abandoned near the Portuguese island territory last week, and has been burning ever since. Multiple firefighting vessels are dousing the hull with seawater but it is believed that the lithium ion batteries used in EVs are keeping the conflagration alight.
A violent land
A new low in American gun violence: one killed and five wounded in a shooting at a protest against police violence in Portland, Oregon. The killer had ranted about the peaceful protesters being terrorists. A crowd member responded, "You're not going to scare us. You're not going to intimidate us". He shot her in the face.
Weekend Reading
The image
A breathtaking mosaic from a chic Roman bath was uncovered under a carpark in the UK this week. The Museum of London Archaeology will painstakingly remove the piece for restoration so Londoners can go back to parking on top of it. Photo supplied by The Guardian .
The quote
"Thwop, muah, boop, boing, drum, glubs."
– The Global Library of Underwater Biological Sounds is documenting the stunning aural tapestry that whales and fish weave to communicate. The library has an ambitious plan to record the subaquatic world that is — because of human predation, climate change, and pollution — becoming quieter every year.
The numbers
83 tonnes of snow
- We all know what a rare and vulnerable continent Antarctica is. New research reveals the shocking and unjustifiable toll that tourism has on it: every tourist effectively melts 83,000kg of snow.
One million tests per day
- Hong Kong authorities are planning to smother the soaring coronavirus outbreak in the city-state by testing the entire population of 7.4m three times in March.
The headline
"Taiwan's birth rate sinks to alarming low as pampered pets replace babies" — The Telegraph .
The special mention
Our special mention this week goes to Hank the Tank . We know who we're backing if it comes to an existential battle between this 227kg bear and the entire state of California.
A few choice long-reads
- It's hard to find anyone who the average American trusts on matters of climate science these days. The local weather reporter is the exception. Here's The Atlantic on the rise of an unlikely science communicator.
- Sitting down can kill you. Don't be alarmed, The Telegraph is here to save you.
- Newslaundry has a superb piece on the furious debate over conversion and "social engineering" in Uttar Pradesh.
The answer...
There most certainly is. Can we interest you in 'Spring Revolution Special Treasury Bonds' ? The opposition in Myanmar is selling interest-free securities to be repaid in two years when — wishfully — the National Unity Government will have overthrown the junta. Does anyone have Carl Icahn's number?
