Putin Launches an Unwelcome Cold War Reboot
We thought we left this game of spheres behind.
Photographer: Denis Balibouse/Getty Images Europe
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Today’s Agenda
Contemplating Orbs: Imperialism Edition
Vladimir Putin might aspire to be the reincarnation of Peter the Great, but another model of an OG empire-builder he might want to consider is James Monroe.
America’s fifth president bought Florida for roughly the modern-day price of Max Scherzer’s MLB contract, added five new states and ran for re-election without even token opposition. More important from Putin’s perspective, Monroe’s most famous accomplishment — the only reason many American schoolchildren know his name — is drawing a line around the whole Western Hemisphere and calling it off-limits to the rest of the world.
Of course, for a while after the birth of the Monroe Doctrine, Europe still had colonies in the New World. But nobody started any new ones. Andreas Kluth writes Monroe had revived an ancient game many would-be empires played in the following centuries: declaring and defending “spheres of influence,” which often roped in countries that had previously labored under the delusion they had some kind of sovereignty.
This practice lost favor, perhaps not coincidentally, right around the time the Soviet Union’s sphere popped like a balloon in a Chuck E. Cheese brawl. That left the United States alone with a world-sized balloon, at which point everybody agreed spheres of influence were passé. Now, with the growing shakiness of the Pax Americana as Chinese and Russian powers grow, this ugly game is rebooting yet again, Andreas warns. Read the whole thing.
Putin echoes the Monroe Doctrine when he demands the West leave Ukraine to Russia. He’s even getting his sphere all over Europe by curbing the flow of Russian gas, which Javier Blas notes has led to perilously low supplies even after a mild winter so far.
Running on Empty
European gas inventories typically don’t drop below 50% until mid-February. This year, they just did, heralding a much tighter market for the rest of the winter
Source: Gas Infrastructure Europe
Note: Dates shift by one day for leap years.
China plays the same game when it threatens and punishes anybody who questions its influence over Taiwan. Beijing isn’t even bothering with the pretense of a sphere when it comes to Hong Kong; its latest crackdown on the free press shows it’s just assimilating the island into the mainland, Matthew Brooker writes.
The U.S. and the rest of Team Anti-Sphere must decide whether they want to play this game again or risk going to war to defend the sovereignty of places like Ukraine and Taiwan. It’s not an easy call. What would James Monroe do? Actually, don’t answer that.
Inflation: The Thing That Wouldn’t Leave
Producer prices cooled off in December, from “core of the Sun” hot to just “surface of the Sun” hot. It’s a sign that maybe the inflationary fever is starting to break. But John Authers writes it could take a while for temperatures to fall back to healthy levels, given pressures in housing costs and “sticky” goods and services (not honey or cinnamon rolls, but stuff like toddlers’ clothes and sofas, which parents know can actually get quite sticky).
View from Atlanta: A Sticky Problem
"Sticky" prices are rising at their fastest since 1991
Federal Reserve Bank of Atlanta, Bloomberg
At the same time, the omicron wave is making a hash of the economy, hurting demand by making everybody sick but also hurting supply, again by making everybody sick. The Fed is determined to tighten policy to fight inflation, but Bloomberg’s editorial board writes it needs to stay frosty and be ready to deal with whatever bizarre new knuckleball the economy throws.
Telltale Charts
While the rest of us suffer from supply-chain hang-ups, container ship operators are making fat bank, Chris Bryant writes. Will they make good use of it so they can keep thriving even after the pandemic ends?
Marvelous Margins
Supply chain woes are great for container shipping profits
Source: Bloomberg, Opinion research
Shows container shipping segment margin, where available, otherwise the group margin. Some container lines are private and don't disclose the relevant figures.
Further Reading
Boris Johnson looks like he’s in real trouble, but the Tories may not have a better alternative. — Therese Raphael
To make social media less awful, it helps to study how users interact with it. A new bill would finally let us do that. — Parmy Olson
The filibuster isn’t going anywhere for a while. — Jonathan Bernstein
We should make it easier for private companies to go public by ditching parts of Sarbanes-Oxley. — Jared Dillian
An activist may have a point that Unilever is going a little too hard on the whole social-purpose thing. — Chris Hughes
TMSC challengers like Intel can’t hold a candle to its massive balance sheet and spending ability. — Tim Culpan
Banks don’t make sense as venues for buying and selling crypto. — Alexis Leondis
ICYMI
The Supreme Court blocked President Joe Biden’s vaccine mandate for businesses.
Covid loses the ability to spread after 20 minutes in air, a study has shown.
Kickers
Lego is being sued over a mini-figure’s jacket. (h/t Scott Kominers)
College enrollment is tumbling.
New map of the universe just dropped.
What happened to the colors in movies and TV?
Notes: Please send mini-figures and complaints to Mark Gongloff at mgongloff1@bloomberg.net.
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Brooke Sample at bsample1@bloomberg.net
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