Despite Mass Layoffs, Initial Jobless Claims Plunge To 8-Month Lows
The US labor market appears to about as strong as it has ever been as the number of Americans filing for first time unemployment benefits plunged to 190k (well below the 214k expectation) – its lowest level since April 2022…
Source: Bloomberg
The non-seasonally-adjusted level of initial claims also reversed lower.
Want to know what drove this unusual drop in claims? Simple – New York saw jobless collapse – a massive outlier…
This has to be storm-related in some way.
Continuing jobless claims rose last week, up from 1.63mm to 1.647mm…
Source: Bloomberg
This is very much not the picture that Jay Powell is hoping to see… At the start of last year, monetary policy transmission was working – jobless claims were rising as financial conditions tightened… then it all broke!
And now… Financial conditions easing and the labor market tightening.
Housing Starts, Building Permits Plunged In December… And It’s About To Get Worse
US Housing Starts and Building Permits both declined in December (-1.4% MoM and -1.6% MoM respectively) with starts better than expected but forward-looking permits below expectations. This is the 3rd straight month of declines in permits and 4th straight drop in starts…
Source: Bloomberg
Total Starts and Permits hit new cycle lows, back to the 2020 COVID lockdown levels…
Source: Bloomberg
Single-family Building Permits tumbled for the 10th straight month (while multi-family starts rebounded notably in December). The pictyure was the opposite for Housing starts where single-family starts soared 11.3% MoM while multi-family starts plunged 18.9% MoM…
Source: Bloomberg
Judging by homebuilder sentiment, building permits are not bouncing back anytime soon…
Source: Bloomberg
Finally, to summarize, in 2022, about 1 million one-family houses were started, down 10.6% from 2021.
Is that what Jay Powell wants? More scarcity, less supply?
Moderna and regulatory agencies did not present clinical data on bivalent shots at the U.S. Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC) committee meetings in June and September 2022, respectively.
Presentations to the FDA and CDC advisory committee excluded data from Moderna’s own clinical study that showed bivalent boosters may be no better at preventing infections than previous booster shots.
The data showed that among people who were never infected, 3.2 percent who took the bivalent booster got infected afterward, while 1.9 percent who took the monovalent booster were later infected.
Advisors to the FDA and CDC expressed concerns of lack of transparency.
Dr. William Schaffner from Vanderbilt University, a nonvoting member of the CDC advisory committee, said that he was disappointed that the data were not presented.
“I think in the interests of transparency, those data should have been presented,” Schaffner said, “though they were very limited, and early data.”
FDA advisor and a professor of clinical pediatrics at the University of California San Diego, Dr. Mark Sawyer, said that he understands people’s concern with the data being excluded, but not all information can be presented.
The committee has limited time, so the information presented must be relevant to the big picture.
“Seeing that data would not have changed my opinion about the outcome,” said Sawyer, “and it would certainly have distracted from the discussion.”
The four advisors for the FDA and CDC who were contacted by The Epoch Times agreed that if the data were presented, it may have prolonged the discussion, but would not have changed the voting outcomes.
Both the FDA’s Vaccines and Related Biological Products Advisory Committee (VRBPAC) meeting and the CDC’s Advisory Committee on Immunization Practices (ACIP) meeting approved Moderna bivalent boosters.
The excluded data come out of a small Moderna study with 772 participants. The study primarily investigated the safety and immunogenicity of boosters, but also looked into the infection and reactogenicity of the subjects.
Immunogenicity, the focus of the study, is defined as the ability of the vaccine to trigger an immune response. Though the study authors reiterated that the trial does not examine vaccine efficacy, the authors acknowledged that immunogenicity has been used to infer efficacy.
Three days before the FDA VRBPAC meeting on June 28, 2022, Moderna published the study as a preprint, and in September, published the study in the New England Journal of Medicine (NEJM).
Both the preprint and peer-reviewed study included data on immunogenicity, safety, reactogenicity, as well as infection.
Moderna’s spokesman Christopher Ridley also told CNN that the company shared the infection data with the FDA and published the study before the FDA panel meeting.
At the VRBPAC meeting, Moderna president Stephen Hoge made several references to the study’s immunogenicity data, which showed that people who took the bivalent shots had a higher antibody level than those who took the monovalent booster, as an argument for the bivalent booster’s superiority.
Hoge also made references to the same study’s data on safety and reactogenicity, but infection rates were excluded.
The FDA’s documents provided to the committee panel on the same day, also referenced the study’s data on immunogenicity, safety, and reactogenicity, yet the infection data were similarly excluded.
According to CNN, the FDA spokesman explained in an email that the data on infection were not included, as “the FDA received the preprint less than a day prior to the advisory committee meeting,” and “generally the FDA only discusses data at advisory committee meetings that the agency has had the opportunity to substantively review.”
This means that the FDA could review the study’s data on immunogenicity, safety, and reactogenicity, but had no opportunity to examine infection data.
VRBPAC member and professor of microbiology and immunology from the University of Iowa, Dr. Stanley Perlman, said that with the absence of these data, there is always the concern that the public will lose trust in the health care system.
At the end of the meeting, the VRBPAC committee ruled in favor of using the Omicron variant’s mRNA in boosters to produce the bivalent COVID-19 vaccines in a 19-2 motion.
The CDC’s meeting with members of the Advisory Committee on Immunization Practices (ACIP) on Sep. 1, 2022, presented by Moderna staff Dr. Jacqueline Miller, also excluded data on infection rates in the presentation (pdf).
Hours into the CDC meeting, voting member of the ACIP Dr. Sybil Cineas asked whether there were any data on breakthrough infections between two experimental groups.
Miller said that between the overall cohort of people who received the bivalent vaccine, the infection rate was 2.5 percent, and for the monovalent group, the rate of 2.4 percent.
However, she failed to mention that for people who never had a previous infection, 3.2 percent of those who took the bivalent vaccine became infected, while 1.9 percent of subjects who took the monovalent developed an infection.
The ACIP members approved Moderna bivalent boosters being made available to people aged 18 and over in a 13-1 vote.
Limitations of Study
Dr. Cody Meissner, a VRBPAC member and a professor in the division of infectious diseases and international health from Dartmouth Health Children’s, also pointed out that the infection data came out of a non-randomized and non-blinded study.
This introduces the risk of bias into the study, as those assigned to bivalent or monovalent boosters were not based on random chance, and trial administrators would know what booster participants received.
While this possibly discounts the significance of the data on infection rates, it can also affect the validity of the findings on immunogenicity, safety, and reactogenicity.
Biochemist and mRNA platform inventor Dr. Robert Malone raised the point that immunogenicity data that only look at antibody levels are not good surrogate measures for vaccine efficacy.
Antibody levels are also not a good measure of immunity, as antibodies will and should wane with time. The long-term immunity they provide is therefore unknown.
It is also unconfirmed if the antibodies produced are neutralizing antibodies that can block the virus and spike proteins, or if they may actually prevent the immune system from killing and controlling the virus, a scenario known as antibody-dependent enhancement.
Increasing Scrutiny of Bivalent Boosters
Bivalent boosters have come under increasing scrutiny for their rapidly declining effectiveness.
A December 2022 preprint study on bivalent vaccines, authored by the Cleveland Clinic, found that the higher the number of previous vaccinations, the greater the risk of contracting COVID-19.
In a letter to the editor (pdf) published in the NEJM, researchers from Columbia University compared antibody serum responses among people who received bivalent boosters, monovalent boosters, and those who were infected.
The authors found that there was no significant difference in neutralizing abilities among these groups when tested against Omicron and other variants.
Dr. Paul Offit, an advisor on the VRBPAC committee who voted against bivalent boosters at the meeting, also published a commentary, saying that young and healthy people shouldn’t get the latest boosters.
“I believe we should stop trying to prevent all symptomatic infections in healthy, young people by boosting them with vaccines containing mRNA from strains that might disappear a few months later,” wrote Offit, also an FDA vaccine panel adviser and professor of pediatrics at the Children’s Hospital of Philadelphia, in the NEJM on Jan. 11, 2023.
In his article, Offit cited two studies suggesting that bivalent boosters, which target the original COVID-19 strain and two Omicron subvariants BA.4 and BA. 5, do not “elicit superior immune responses.”
“Why did the strategy for significantly increasing BA.4 and BA.5 neutralizing antibodies using a bivalent vaccine fail?” he asked.
“The most likely explanation is imprinting. The immune systems of people immunized with the bivalent vaccine, all of whom had previously been vaccinated, were primed to respond to the ancestral strain of SARS-CoV-2. They therefore probably responded to epitopes shared by BA.4 and BA.5 and the ancestral strain, rather than to new epitopes on BA.4 and BA.5.”
Meissner, likewise, expressed that healthy people younger than 65 years of age may not need bivalent boosters.
“We don’t know … how many or how often boosters are necessary. And could there be consequences from giving multiple vaccine doses that we don’t fully understand at this time?”
A peer-reviewed study published on Jan. 12 in Germany also showed that people who received higher numbers of mRNA vaccines had a higher IgG4 antibody response. The authors did not further discuss what these antibody levels may indicate, but studies have associated IgG4 antibodies with immune tolerance, which is when the body reduces its immune response to fight off an infection.
Saudi oil giant Aramco expects the Chinese reopening and a pick-up in jet fuel demand to lead to a rebound in global oil demand this year, Amin Nasser, the CEO of the world’s biggest oil firm, told Bloomberg in an interview published on Wednesday.
“We are very optimistic in terms of demand coming back to the market,” Nasser told Bloomberg on the sidelines of the World Economic Forum in Davos.
Good signs about demand have started to emerge from China, Aramco’s top executive said.
“Hopefully, in the next couple of months, we’ll see more of a pickup in the economy there,” he told Bloomberg.
Aviation is another bright spot: demand for jet fuel is now around 1 million barrels a day below pre-pandemic levels, according to Nasser, roughly half the figure from a year ago. “It’s picking up,” he said at the World Economic Forum in Davos.
Nasser reiterated the long-held view of Saudi Arabia and many analysts that the underinvestment in the industry in the past few years will come back to haunt the market.
The world will need 4-6 million bpd of new supply just to offset the natural decline at maturing oilfields globally, Nasser told Bloomberg. Spare capacity is just 2 million barrels per day (bpd) currently, and it is likely to shrink as China reopens, he added.
Aramco’s upbeat outlook on global demand this year is also shared by OPEC and the International Energy Agency (IEA).
Signs of cautious optimism about a recovery in economies and oil demand have emerged, OPEC Secretary General Haitham Al-Ghais told Bloomberg Television in an interview on Tuesday.
“We are optimistic, but we are cautiously optimistic,” Al-Ghais told Bloomberg.
The IEA also struck an upbeat tone in its closely-watched Oil Market Report (OMR) for January published today.
China’s reopening is set to drive global oil demand to a record high of 101.7 million bpd this year, up by 1.9 million bpd from 2022. That’s 200,000 bpd higher growth for 2023 than the 1.7 million bpd growth the IEA expected in December. Almost half of the oil demand growth this year will come from China after Beijing lifted its Covid restrictions, the IEA said on Wednesday.
Tech Bosses Face Criminal Charges In UK If Children Exposed To Harmful Content
Tech executives whose online platforms routinely fail to protect children from “online harm” will face criminal charges and up to two years in jail, after UK ministers reached a deal this week.
Rishi Sunak was facing the prospect of defeat in a Commons vote on Tuesday after a rebel amendment to the online safety bill won opposition support. However, supporters have now withdrawn the amendment after the government agreed to change the legislation. -The Guardian
As part of the agreed upon legislation, senior managers at tech firms who ignore child safety warnings from Ofcom, the UK’s communications regulator, would be held criminally liable over content deemed ‘harmful.’ Examples include the promotion of self-harm and eating disorders.
So basically, anything ‘they’ don’t like and deem ‘harmful.’
Tech executives who can prove they’ve “acted in good faith to comply in a proportionate way” will be spared charges.
The rebellion had been led by Miriam Cates and Sir Bill Cash, with the support of senior figures including Iain Duncan Smith and Priti Patel. The online safety bill returns to the Commons on Tuesday but the changes, which were first reported by the Daily Telegraph, will be laid down when the legislation moves to the House of Lords. -The Guardian
According to child protection charity NSPCC, the threat of liability will help create ‘culture change’ within tech firms.
“By committing to senior manager liability the culture secretary has sent a strong and welcome signal that she will give the online safety bill the teeth needed to drive a culture change within the heart of tech companies that will help protect children from future tragedies,” said Richard Collard, the associate head of child safety online policy at the NSPCC.
The final vote was delayed due to issues in the translation of the 400-page legal document…
The final vote on the European Union’s (EU) much-awaited set of crypto rules, known as the Markets in Crypto Assets regulation (MiCA), was deferred to April 2023.
It marks the second delay in the final vote, which was previously postponed from November 2022 to February 2023.
The latest delay is due to a technical issue where the official 400-page document couldn’t be translated into the 24 official languages of the EU, according to The Block.
Legal documents like the MiCA, which are drafted in English, must comply with EU regulations and be published in all 24 official languages of the union.
The first delay in November 2022 that deferred the final vote to February was also caused by translation issues. A delay in the final vote means European financial regulators must wait longer before drafting the implementation rules for the legislation. Once the MiCA has received official approval, the financial regulators have 12 to 18 months to create the technical standards.
Stefan Berger, a member of the European Parliament’s economics committee, has described the FTX collapse as one of the “Lehman Brothers moments” that “must be prevented,” when arguing for the necessity of regulations such as MiCA.
Shame! The #FTX/#Alameda case has cost enormous trust. Such Lehman Brothers moments must be prevented in the crypto space. That’s exactly what #MiCA is for. Crypto assets are not play money. Crypto asset service providers must ensure internal risk management mechanisms. https://t.co/zNrB8CdUbU
With MiCA, European policymakers aim to set a standard regulation to establish harmonized rules for crypto assets at the EU level, thereby providing legal certainty for crypto assets not covered by existing EU legislation.
The crypto regulation will establish guidelines for the operation, structure and governance of issuers of digital asset tokens. The legislation will also offer rules on transparency and disclosure requirements for issuing and trading crypto assets.
Europe Forecast To End Winter With NatGas Inventories Half Full
Europe’s underground natural gas storage is forecasted to end the winter season above the 50% mark and might have enough supplies to replenish inventory back to adequate levels before the start of next winter.
Europe is on track to end the winter with its gas inventories over 50% full and to have more than enough gas to completely replenish its storage by the start of next winter, according to the latest forecasts from BloombergNEF. This comes as the recent crash in prices is not expected to be enough to rekindle demand for liquefied natural gas in Asia, and demand destruction in Europe, particularly in the power sector, continues. — BloombergNEF.
Mild weather has helped the energy-stricken continent overcome a sharp drawdown in supplies.
The European Union has severed energy trading with Russia. It’s no longer receiving coal and crude oil, and NatGas has been significantly reduced. The Bloc has rejiggered energy supply chains to receive shipments of liquefied natural gas from the US, Qatar, and other major producers.
“The more gas we have in storage facilities at the beginning of the year, the less stress and cost we will face in filling them again for next winter,” said Klaus Mueller, head of Germany’s network regulator.
Morgan Stanley recently noted that European NatGas consumption would be 16% below five-year average levels throughout the year.
Benchmark NatGas prices have tumbled a staggering 80% since last August.
However, colder weather swept across parts of the continent this week, boosting heating demand.
Europe might be in a better position than once feared, but it is not yet out of the woods.
The suggestion was dismissed by politicians and medical professionals who called on people to take responsibility for their own choices…
The head of a food watchdog in Britain has been ridiculed for suggesting that workers bringing cake into the office is as harmful to the nation’s health as passive smoking.
Professor Susan Jebb, chairwoman of the Food Standards Agency (FSA), said that she only eats cake during the day because colleagues give her the opportunity to do so. She then called on office workers to refrain from the practice to help the fight against obesity.
“If nobody brought cakes into the office, I would not eat cakes in the day, but because people do bring cakes in, I eat them,” she told The Times newspaper.
“Now, OK, I have made a choice, but people were making a choice to go into a smoky pub.
“With smoking, after a very long time, we have got to a place where we understand that individuals have to make some effort but that we can make their efforts more successful by having a supportive environment.
“We still don’t feel like that about food,” she added.
The FSA oversees food safety and food hygiene in England, Wales, and Northern Ireland. It describes its main statutory objective as protecting public health.
The food tsar’s comments, however, were dismissed by politicians and medical professionals alike who refuted the comparison with passive smoking and suggested individuals simply need to utilize their own willpower.
During the government’s Wednesday media briefing, in which complimentary cake was reportedly available, Prime Minister Rishi Sunak’s spokesperson insisted there was “nothing to stop” co-workers from bringing treats to the office on occasion, adding: “The PM believes personal choice should be baked into our approach.” He confirmed the government would not be accepting any recommendation to prevent office workers from bringing treats to work.
A spokesperson for opposition leader Sir Keir Starmer added that the Labour leader is a fan of cake “in moderation.”
Speaking to the BBC, GP Dr. Helen Wall called upon individuals to take responsibility for their own health.
“At the end of the day, you’ve got to have a little bit of willpower, don’t you? If somebody’s smoking next to you, you can’t help but inhale that.
“If someone’s got a cake next to you, you don’t have to eat it, do you?” she asked.
“This is just ludicrous,” added Mark Littlewood, director general of the free-market Institute of Economic Affairs (IEA). “I hope there isn’t a single penny of taxpayers’ money being spent on this utter nonsense.”
Serbia Demands Russia Halt Local Recruitment For Ukraine War
Serbia and Russia are experiencing rare tensions over the war in nearby Ukraine, with the Serbian government on Tuesday issuing a formal request for Moscow to halt all attempts to recruit Serbs to fight in the Ukraine conflict.
The controversy centers on the Wagner private military firm, which has reportedly expanded its recruitment efforts inside Serbia. The St. Petersburg-based mercenary firm reportedly has direct ties with President Putin, and has been accused of acting with impunity in Ukraine.
It’s long been illegal in Serbia for any of its citizens to go off and fight in a foreign conflict, with Serbian Defense Minister Milos Vucevic recently reiterating in light of the Ukraine war that “this will result in legal consequences.”
“Why do you, from Wagner, call anyone from Serbia when you know that it is against our laws?” Serbian President Aleksandar Vucic said in a TV broadcast, stressing Wagner must end its activities.
Vucic also called out the noticeable uptick in online and social media material being circulated by Wagner and Russian state media in the Serbian language.
As an example, this week Russia’s RIA Novosti news agency published the below widely circulated video touting “Serbian volunteers” fighting alongside Russian forces…
Wagner likely sees Serbia as fertile recruitment ground, given there have been sporadic large-scale pro-Russia protests in major Serbian cities related to events in Ukraine of late. The two countries also have predominantly Orthodox Christian populations which also unite the two in their Slavic culture and identities.
Despite broad swathes of the Serbian population generally being Russia-sympathetic, Serbian President Vucic this week stressed that he sees the “EU path” as the only one for Serbia, while also expressing support for Ukraine and efforts to regain its territory, including in Crimea.
Both also despise NATO, given in Serbia’s case the 1999 NATO bombing of Belgrade and the war which resulted in Kosovo being carved out of Serbia as an independent state recognized as such by the US and West.
Nearly a year in, the war in Ukraine has cost hundreds of thousands of lives and brought the world to the brink of, in President Joe Biden’s own words, “Armageddon.” Alongside the literal battlefield has been a similarly bitter intellectual battle over the war’s causes.
Commentators have rushed to declare the long-criticized policy of NATO expansion as irrelevant to the war’s outbreak, or as a mere fig leaf used by Russian President Vladimir Putin to mask what Condoleezza Rice and Robert Gates recently called “his messianic mission” to “reestablish the Russian Empire.” Fiona Hill, a presidential advisor to two Republican administrations, has deemed these views merely the product of a “Russian information war and psychological operation,” resulting in “masses of the US public … blaming NATO, or blaming the US for this outcome.”
Yet a review of the public record and many dozens of diplomatic cables made publicly available via WikiLeaks shows that US officials were aware, or were directly told over the span of years, that expanding NATO was viewed by Russian officials well beyond Putin as a major threat and provocation, that expanding it to Ukraine was a particularly bright red line for Moscow, that it would inflame and empower hawkish, nationalist parts of the Russian political spectrum, and that it could ultimately lead to war.
In a particularly prophetic set of warnings, US officials were told that pushing for Ukrainian membership in NATO would not only increase the chance of Russian meddling in the country, but risked destabilizing the divided nation — and that US and other NATO officials pressured Ukrainian leaders to reshape this unfriendly public opinion in response. All of this was told to US officials in both public and private by not just senior Russian officials going all the way up to the presidency, but by NATO allies, various analysts and experts, liberal Russian voices critical of Putin, even, sometimes, US diplomats themselves.
This history is particularly relevant as US officials now test the red line China has drawn around Taiwan’s independence, risking military escalation that will first and foremost be aimed at the island state. The US diplomatic record regarding NATO expansion suggests the perils of ignoring or outright crossing another military power’s red lines, and the wisdom of a more restrained foreign policy that treats other powers’ spheres of influence with the care they treat the United States’ own.
An Early Exception
NATO expansion had been fraught from the start. The pro-Western Boris Yeltsin had told Bill Clinton he “saw nothing but humiliation for Russia if you proceed” with plans to renege on the verbal promises made years earlier not to enlarge NATO eastward, and warned it would be “sowing the seeds of mistrust” and would “be interpreted, and not only in Russia, as the beginning of a new split in Europe.” Just as containment architect George Kennan had predicted, the decision to go ahead helped inflame Russian hostility and nationalism: The Duma (the Russian parliament) declared it “the largest military threat to our country over the last fifty years,” while the leader of the opposition Communist Party called it “a Treaty of Versailles for Russia.”
By the time Putin became president the day before the new Millennium, “the initial hopes and plans of the early ‘90s [were] dead,” a leading liberal Russian politician declared. The first round of NATO enlargement had been followed by NATO’s 1999 bombing of Yugoslavia, done without UN security council authorization, triggering a Russian cut-off of contact with the alliance. By 2000, the revised Russian national security strategy warned that NATO using force beyond its borders “’is a threat of destabilization of the whole strategic situation,” while military officers and politicians started claiming“that if NATO expands further, it would ‘create a base to intervene in Russia itself,’” the Washington Postreported.
Ironically, there would be one exception to the next two decades’ worth of rising tensions over NATO’s eastward creep that followed: the early years of Putin’s presidency, when the new Russian president defied the Russian establishment to try and make outreach to the United States. Under Putin, Moscow re-established relations with NATO, finally ratified the START II arms control treaty, even publicly floated the idea of Russia eventually joining the alliance, inviting attacks from his political rivals for doing so. Even so, he continued to raise Moscow’s traditional concerns about the alliance’s expansion, telling NATO’s secretary-general it was “a threat to Russia.”
“If a country like Russia feels threatened, this would destabilize the situation in Europe and the entire world,” he’d said in a speech in Berlin in 2000.
Putin softened his opposition as he sought to make common cause with the George W. Bush administration. “If NATO takes on a different shape and is becoming a political organization, of course, we would reconsider our position with regard to such expansion, if we are to feel involved in the processes,” he said in October 2001, drawing attacks from political rivals and other Russian elites.
As NATO for the first time granted Russia a consultive role in its decision-making, Putin sought to assist its expansion. Italian president Silvio Berlusconi made a “personal request” to Bush, according to an April 2002 cable, to “understand Putin’s domestic requirements,” that he “needs to be seen as part of the NATO family,” and to give him “help in building Russian public opinion to support NATO enlargement.” In another cable a top-ranking state department official urges holding a NATO-Russia summit to “help President Putin neutralize opposition to enlargement,” after the Russian leader said allowing NATO expansion without an agreement on a new NATO-Russia partnership would be politically impossible for him.
This would be the last time any Russian openness toward NATO expansion is recorded in the diplomatic record held by WikiLeaks.
Allies Weigh In
By the middle of the 2000s, US-Russian relations had deteriorated, partly owing to Putin’s bristling at US criticism of his growing authoritarianism at home, and to US opposition to his meddling in the 2004 Ukrainian election. But as explained in a September 2007 cable by New Eurasia Foundation president Andrey Kortunov, now a Russian foreign policy advisor who has publicly criticized both Kremlin policy and the current war, US mistakes were also to blame, including Bush’s invasion of Iraq and a general sense that he’d given little in return for Putin’s concessions.
“Putin had clearly embarked on an ‘integrationist’ foreign policy at the beginning of his second presidential term, which was fueled by the 9/11 terrorist attacks and good relations with key leaders like President Bush” and other leading NATO allies, Kortunov said according to the cable. “However,” he said, “a string of perceived anti-Russian initiatives,” which included Bush’s withdrawal from the Anti-Ballistic Missile (ABM) Treaty and “further expansion of NATO,” ultimately “dashed Putin’s hopes.”
What followed was a steady drumbeat of warnings about NATO’s expansion, particularly regarding neighboring Ukraine and Georgia, much of it from Washington’s NATO allies.
“[French presidential diplomatic advisor Maurice] Gourdault-Montagne warned that the question of Ukrainian accession to NATO remained extremely sensitive for Moscow, and concluded that if there remained one potential cause for war in Europe, it was Ukraine,” reads a September 2005 cable. “He added that some in the Russian administration felt we were doing too much in their core zone of interest, and one could wonder whether the Russians might launch a move similar to Prague in 1968, to see what the West would do.”
This was just one of manysimilarwarnings from French officials, that admitting the two states “would cross Russian ‘tripwires’,” for instance. A February 2007 cable records then-director general for political affairs Gérard Araud’s recounting of “a half-hour anti-US harangue” from Putin in a meeting one day earlier, in which he “linked all the dots” of Russian unhappiness with US behavior, including “US unilateralism, its denial of the reality of multipolarity, [and] the anti-Russian nature of NATO enlargement.”
Germany likewise raised repeated concerns about a potentially bad Russian reaction to a NATO Membership Action Plan (MAP) for the two states, with deputy national security advisor Rolf Nikel stressing that Ukraine’s entry was particularly sensitive. “While Georgia was ‘just a bug on the skin of the bear,’ Ukraine was inseparably identified with Russia, going back to Vladimir of Kiev in 988,” Nikel recounted, according to the cable.
Other NATO allies repeated similar concerns. In a January 2008 cable, Italy affirmed it was a “strong advocate” for other states’ entry into the alliance, “but is concerned about provoking Russia through hurried Georgian integration.” Norway’s foreign minister (and today, prime minister) Jonas Gahr Stoere made a similar point in an April 2008 cable, even as he insisted Russia mustn’t be able to veto NATO’s decisions. “At the same time he says that he understands Russia’s objections to NATO enlargement and that the alliance needs to work to normalize the relationship with Russia,” reads the cable.
Almost Complete Consensus
The thinkers and analysts that US officials conferred with likewise made clear the Russian elite’s anxieties over NATO and its expansion, and the lengths they might go to counteract it. Many were transmitted by then-US Ambassador to Russia William Burns, today serving as Biden’s CIA director.
Recounting his conversations with various “Russian observers” from both regional and US think tanks, Burns concluded in a March 2007 cable that “NATO enlargement and U.S. missile defense deployments in Europe play to the classic Russian fear of encirclement.” Ukraine and Georgia’s entry “represents an ‘unthinkable’ predicament for Russia,” he reported six months later, warning that Moscow would “cause enough trouble in Georgia” and counted on “continued political disarray in Ukraine” to halt it. In an especially prescient set of cables, he summed up scholars’ views that the emerging Russia-China relationship was largely “the by-product of ‘bad’ US policies,” and was unsustainable — “unless continued NATO enlargement pushed Russia and China even closer together.”
Cables record Russian intellectuals across the political spectrum making such points again and again. One June 2007 cable records the words of a “liberal defense expert” and the “liberal editor” of a leading Russian foreign policy journal, that after Russia had done “everything to ‘help’ the US post-9/11, including opening up Central Asia for coalition anti-terrorism efforts,” it had expected “respect for Russia’s ‘legitimate interests.’” Instead, Lyukanov said, it had been “confronted with NATO expansion, zero-sum competition in Georgia and Ukraine, and US military installations in Russia’s backyard.”
“Ukraine was, in the long term, the most potentially destabilizing factor in US-Russian relations, given the level of emotion and neuralgia triggered by its quest for NATO membership,” went the counsel of Dmitri Trenin, then-deputy director of the Russian branch of the US-based Carnegie Endowment for International Peace, in a Burns-authored February 2008 cable. For Ukraine, he said prophetically, it would mean that elements within the Russian establishment would be encouraged to meddle, stimulating US overt encouragement of opposing political forces, and leaving the US and Russia in a classic confrontational posture.
Indeed, opposing NATO’s enlargement eastward, particulary in Ukraine and Georgia, was “one of the few security areas where there is almost complete consensus among Russian policymakers, experts and the informed population,” he cabled in March 2008. Ukraine was the “line of last resort” that would complete Russia’s encirclement, said one defense expert, and its entry into NATO was universally viewed by the Russian political elite as an “unfriendly act.” Other experts cautioned “that Putin would be forced to respond to Russian nationalist feelings opposing membership” of Georgia, and that MAPs for either would trigger a cut-back in the Russian military’s genuine desire for co-operation with NATO.
From Liberals to Hardliners
These analysts were reiterating what cables show US officials heard again and again from Russian officials themselves, whether diplomats, members of parliament, or senior Russian officials all the way up to the presidency, recorded in nearly three-dozen cables at least.
NATO enlargement was “worrisome” said one Duma member, while Russian generals were “suspicious of NATO and US intentions,” cablesrecord. Just as analysts and NATO officials had said, Kremlin officials characterized NATO’s designs on Georgia and Ukraine as especially objectionable, with ambassador to NATO Dmitry Rogozin stressing in a February 2008 cable that offering MAPs to either “would negatively impact NATO’s relations with Russia” and “raise tension along the borders between NATO and Russia.”
Deputy foreign minister Grigory Karasin “underscored the depth of Russian opposition” to their membership, a different March 2008 cable states, underlining that the political elite “firmly believes” it “represented a direct security threat to Russia.” The future, he said, rested on the “strategic choice” Washington made about “what kind of Russia” it wanted to deal with: “a Russia that is stable and ready to calmly discuss issues with the US, Europe and China, or one that is deeply concerned and filled with nervousness.”
Indeed, numerous officials — including then-director for security and disarmament Anatoly Antonov, today serving as Russia’s ambassador to the United States — warned pushing ahead would produce a less co-operative Russia. Pushing NATO’s borders to the two former Soviet states “threatened Russian and the entire region’s security, and could also negatively impact Russia’s willingness to cooperate in the [NATO-Russia Council],” one foreign ministry official warned, while others pointed to the policy to explain Putin’s threats to suspend the Conventional Armed Forces in Europe (CFE) treaty. “CFE would not survive NATO enlargement,” went a Russian threat in one March 2008 cable.
Maybe most pertinent were the words of Russian Foreign Minister Sergei Lavrov, at the time a veteran diplomat respected in the West, and who continues to serve in the position today. At least eight cables, a number of them written by Burns, record Lavrov’s expressions of opposition to expanding NATO to Ukraine and Georgia over the course of 2007-08, when Bush’s decision, over the objections of allies, to publicly affirm their future accession led to a spike in tensions.
“While Russia might believe statements from the West that NATO was not directed against Russia, when one looked at recent military activities in NATO countries … they had to be evaluated not by stated intentions but by potential,” went Burns’s summary of Lavrov’s annual foreign policy review in January 2008. On the same day, he wrote, a foreign ministry spokesperson warned that Ukraine’s “likely integration into NATO would seriously complicate the many-sided Russian-Ukrainian relations” and lead Moscow to “have to take appropriate measures.”
Besides being an easy way to garner domestic support from nationalists, Burns wrote, “Russia’s opposition to NATO membership for Ukraine and Georgia is both emotional and based on perceived strategic concerns about the impact on Russia’s interests in the region.”
“While Russian opposition to the first round of NATO enlargement in the mid-1990’s was strong, Russia now feels itself able to respond more forcefully to what it perceives as actions contrary to its national interests,” he concluded.
Lavrov’s criticism was shared by a host of other officials, not all of them hardliners. Burns recounted a meeting with former prime minister Yevgeny Primakov, a Gorbachev protégé who had negotiated over NATO’s first expansion with Madeleine Albright, who warmly eulogized him years later as a pragmatist. The US push for MAP for Georgia and Ukraine “‘infuriated’ Russians and threatened other areas of US-Russia strategic cooperation,” Primakov had said according to Burns, mentioning he’d be asked later that day on TV about rethinking Crimea’s status as Ukrainian territory. “[T]this is the kind of discussion that MAP produces,” he said — meaning, that it inflamed nationalist and hardline sentiment.
“Primakov said that Russia would never return to the era of the early 1990s and it would be a ‘colossal mistake’ to think that Russian reactions today would mirror those during its time of strategic weakness,” Burns’s cable states in closing.
This went all the way to the top, as US officials noted in cables reacting to a famously strident speech Putin gave at the Munich Security Conference in February 2007, which saw Putin assail NATO expansion and other policies as part of a wider, destabilizing US abuse of its sole-superpower status. Putin’s tone may have been “unusually sharp,” Primakov told Burns, but their substance “reflected well-known Russian complaints predating Putin’s election,” shown by the fact that “talking heads and Duma members were almost unanimous” in supporting the speech. A year later, a March 2008 cable reported German chancellor Angela Merkel’s final, two-hour-long meeting with Putin, in which he “argued strongly” against MAP for Ukraine and Georgia.
Putin’s Exit
Any illusions this stance would evaporate with Putin leaving the presidency were quickly dispelled. Such warnings continued and, if anything, grew more intense, after Putin was replaced by his liberal successor, Dmitry Medvedev, whose ascent sparked hopes for a more democratic Russia and an improved US-Russian relationship.
Under Medvedev, officials from the Russian ambassador to NATO and various officials in the foreign ministry to the chairman of the Duma’s international affairs committee made much the same warnings, cables show. In some cases, as with Karasin and Lavrov, it was the same officials making these long-standing complaints.
Medvedev himself “reiterated well known Russian positions on NATO enlargement” to Merkel in his first trip to Europe in June 2008, even as he avoided bringing up MAP for Ukraine and Georgia specifically. “Behind Medvedev’s polite demeanor, Russian opposition to NATO enlargement remained a red-line, according to both conservative and moderate observers,” one June 2008 cable reads, a view shared by a leading liberal analyst. Even critics to his right read Medvedev’s words as “an implicit commitment to use Russian economic, political and social levers to raise the costs for Ukraine and Georgia” if they moved closer to the alliance. The cable’s author, Deputy Chief of Mission at the US embassy in Moscow Daniel Russell, concluded he “agree[d] with the common wisdom.”
By August 2008, following the war with Georgia, Medvedev started to sound a lot more like his predecessor, threatening to cut ties with the alliance and restating grievances about encirclement. A cable from after the end of the five-day war — which an EU-commissioned report would later blame the Georgian government for starting — stated that “even the most pro-Western political experts” were “pointing the finger at the US” for jeopardizing US-Russian relations, with US dismissal of Russia’s concerns over, among other things, NATO expansion a key part of some of their analysis. Echoing Burns, one analyst argued that Russia finally felt “strong enough to stand up to the West” when it ignored its concerns.
Those concerns were central at a roundtable of Russian analysts months later, a January 2009 cable shows, who explained to a group of visiting US congresspeople Russians’ “deep displeasure” with the US government, and stressed the “bitter divorce” between Russia and Georgia would be even uglier with Ukraine. Pushing MAP for the country “helped the ‘America haters come to power’ in Russia and gave legitimacy to the hard-liners’ vision of ‘fortress Russia’,” said one.
Increasingly, cables show, such warnings came from liberals, even those who hadn’t previously viewed NATO and the United States as Russia’s chief threats. An August 2008 cable described a meeting with Russian human rights ombudsman Ambassador Vladimir Lukin — described as “a liberal on the Russian political scene, someone disposed toward cooperation with the US” — who explained Medvedev’s post-war recognition of independence of Georgia’s breakaway regions, which he had at first opposed, as a security-driven response to NATO’s drift towards Russia’s borders. Because escalations like the 2008 US-Poland misssile defense agreement showed anti-Russia actions “would not stop,” he said, “Moscow had to show that, like the US, it can and will take steps it deems necessary to defend its interests.”
The cable concluded that Lukin’s views “reflect the thinking of the majority of Russian foreign policy elite.”
Selling NATO to Ukraine
Other than Burns — whose Bush-era memos warning of the breadth of Russian opposition to NATO expansion and that it would provoke intensified meddling in Ukraine have become famous since the Russian invasion — US officials largely reacted with dismissal.
Russian objections to the policy and other long-simmering issues were described over and over in the cables as “oft-heard,” “old,” “nothing new,” and “largely predictable,” a “familiar litany” and a “rehashing” that “provided little new substance.” Even NATO ally Norway’s position that it understood Russian objections even as it refused to let Moscow veto the alliance’s moves was labeled a case of “parroting Russia’s line.”
US officials were similarly dismissive of explicitwarnings — from Kremlin officials, NATO allies, experts and analysts, even Ukrainian leadership — that Ukraine was “internally divided over NATO membership” and that public support for the move was “not fully ripe.” The east-west split within the country over the idea made it “risky,” German officials cautioned, and could “break up the country.” Its three leading politicians all “took foreign policy positions based on domestic political considerations, with little regard to the long-term effects on the country,” they said.
Those very politicians likewise made clear public opinion wasn’t there, whether anti-Russian foreign minister Volodymyr Ogryzko, or more Russian-friendly prime minister Viktor Yanukovych — later misleadingly painted as a Kremlin puppet and ousted as president in the 2014 Maidan protests — who boasted to a US diplomat that support for NATO had jumped under his tenure. In response, the cables show, NATO officials pressed Ukranian leaders to take a firm public stance in favor of joining, and discussed how to persuade Ukraine’s population “so that they would be more favorable towards it.” Ogryzko later disclosed to Merkel “that a public education campaign is already underway,” and that Ukraine “had discussed the issue of public education campaigns with Slovakia and other nations that had joined NATO recently.”
This came in spite of acknowledged risks. Cables record liberal Russian analysts cautioning“that [Ukrainian president Viktor] Yushchenko was using NATO membership to shore up a Ukrainian national identity that required casting Russia in the role of enemy,” and that “because membership remained divisive in Ukrainian domestic politics, it created an opening for Russian intervention.”
“Experts tell us that Russia is particularly worried that the strong divisions in Ukraine over NATO membership, with much of the ethnic-Russian community against membership, could lead to a major split, involving violence or at worst, civil war,” Burns wrote in February 2008. Russia, he wrote, would then “have to decide whether to intervene; a decision Russia does not want to have to face.”
Despite the dismissive attitude of many US officials, parts of the US national security establishment clearly understood Russian objections weren’t mere “muscle-flexing.” The Kremlin’s anxieties over a “direct military attack on Russia” were “very real,” and could drive its leaders to make rash, self-defeating decisions, stated a 2019 report from the Pentagon-funded RAND Corporation that explored theoretical strategies for overextending Russia.
“Providing more US military equipment and advice” to Ukraine, it stated, could lead Moscow to “respond by mounting a new offensive and seizing more Ukrainian territory” — something not necessarily good for US interests, let alone Ukraine’s, it noted.
Warnings Ignored
Nevertheless, in the years, months, and weeks that led up to the Russian invasion, successive US administrations continued on the same course.
Ukraine’s co-operation with NATO has “deepened over time,” the alliance itself says today. By the war’s outbreak, the country frequently hosted Western troops at a military base, its soldiers received NATO training, it planned two new NATO-linked naval bases, and it received unprecedented sums of US military aid, including offensive arms — a Donald Trump policy his liberal predecessor had explicitly rejected, out of concern for provoking a disastrous response from Moscow. Three months before the invasion, Ukraine and the United States signed an updated Charter on Strategic Partnership “guided” by Bush’s controversial Bucharest declaration, which both deepened security co-operation between the two countries and supported Ukraine’s membership aspirations, viewed as an escalation in Moscow.
As US military activity has increased in the region since 2016, sometimes involving Ukraine and Georgia, NATO-Russian tensions have ratcheted up too. While Moscow publicly objected to US missions experts feared were too provocative, NATO and Russian forces have experienced thousands of dangerous military encounters in the region and elsewhere. By December, with fears of invasion ramping up, Putin told Biden personally that “the eastward expansion of the Western alliance was a major factor in his decision to send troops to Ukraine’s border,” the Washington Postreported.
None of this means other factors played no role in the war’s outbreak, from Russian domestic pressures and Putin’s own dim view of Ukrainian independence, to the copious other well-known Russian grievances toward US policy that frequently appear in the diplomatic record, too. Nor does it mean, as hawks argue, that this somehow “justifies” Putin’s war, any more than understanding how US foreign policy has fueled anti-American terrorism “justifies” those crimes.
What it does mean is that claims that Russian unhappiness over NATO expansion is irrelevant, a mere “fig leaf” for pure expansionism, or simply Kremlin propaganda are belied by this lengthy historical record. Rather, successive US administrations pushed ahead with the policy despite being warned copiously for years — including by the analysts who advised them, by allies, even by their own officials — that it would feed Russian nationalism, create a more hostile Moscow, foster instability and even civil war in Ukraine, and could eventually lead to Russian military intervention, all of which ended up happening.
“I don’t accept anyone’s red line,” Biden said in the lead-up to the invasion, as his administration rejected negotiations with Moscow over Ukraine’s NATO status. We can only imagine the world in which he and his predecessors had.
