Almost eight years after Vladimir Putin’s Russian Federation invaded Ukraine, annexed its Crimean Peninsula and shot down Malaysian Airlines MH17 over Ukraine’s Donetsk region, he’s apparently at it again.

All we know, given the scant coverage that 24-7 streaming and cable news affords us today, is that Russian forces are massing for a probe (in the middle of a pandemic) into Ukraine with unclear aims or goals but fate has given us a clue.

Germany’s naval commander Vice Admiral Kay-Achim Schoenbach was forced to resign yesterday, having unintentionally let a public cat out of the bag to the West’s chagrin. At an Indian defence symposium he said that Putin was simply looking for “respect”. And given Putin’s age, omnipotence, unbridled wealth—yet limited means to exercise ambition—the admiral is likely right.

But what sent NATO heads spinning was the admiral’s next assertion that the West had better support Putin in Ukraine if NATO wanted a capable strategic bloc against China. Truth be told, soul searching in NATO has already been underway. The question is whether Ukraine still warrants its post-Communist independence or whether, historically and logistically, it’s always been Russian?

This question holds urgency too. The manner of Ukraine’s fall will set the stage for what comes next. One scenario suggests the reunification of Kaliningrad with its Russian mainland. If so, that puts Belarus and Poland in the Russian Federation’s sights with a casus belli if ever there was one.

Let’s step back though, to the days of March 2014, with a reprise of an essay I wrote at the time when the world was equally scratching its head, trying to make sense of Putin’s push into Crimea.

Here a curious coincidence reared itself, one easily missed in the media yet, one involving the world’s then fourth richest person and a ubiquitous underpinning of modern geopolitics: that of globalised business.

Crimea and Warren Buffett’s Gas

Originally published March 18, 2014.

When Warren Buffett slipped a loss of $873m into his annual Berkshire Hathaway announcement to shareholders three weeks ago, no one blinked. To many, Buffett is a kind of god—an investment god and some would capitalize the “g”.

In this world of herd mentality or irrational exuberance as Alan Greenspan once put it Buffett leads a pantheon from which all investment wisdom flows. It’s just that I’ve never cottoned on to the whole mentality of mortal-worship; for that temple includes such deities as “bubble-maker” Greenspan himself, “it’s only a virus” Bill Gates, “what’s nineteen [WhatsApp] billion?” Mark Zuckerberg, and “don’t ask me—ask Enron” Jeff Skilling.

That was … until now.

Ever heard of Energy Future Holdings? As proof of blind faith in all things Buffett, neither had most of his company’s shareholders it seems. You’d most likely know EFH under its pre leveraged buyout name, TXU.

As Buffett decided to reveal on page 16 of his 24-page announcement:

Most of you have never heard of Energy Future Holdings. Consider yourselves lucky; I certainly wish I hadn’t. The company was formed in 2007 to effect (sic) a giant leveraged buyout of electric utility assets in Texas.

And he delivers the coup de grace:

Unless natural gas prices soar, EFH will almost certainly file for bankruptcy in 2014. Last year, we sold our holdings for $259 million. While owning the bonds, we received $837 million in cash interest. Overall, therefore, we suffered a pre-tax loss of $873 million.

Not forgetting a loss that would put most CEOs in a golden parachute, can we just reflect for a moment on those first few words: “Unless natural gas prices soar”?

When I first read that, I thought how very Enron of you Mr. Buffett! Indeed, let’s all join hands in the hope those heating and cooking prices for the elderly rocket. I can see Jeff Skilling shaking his head and blurting out:

How the hell can he get away with that when all I did was screw up California?

And another emperor has no clothes.

Then something strange happened: Russia, the world’s largest natural gas producer, invaded Crimea.

At this stage, its effect on global gas supplies and hence price, is largely unknown. EFH still looks headed for the chopping block, and gas futures as of a week ago were pointing downside as one of the northern hemisphere’s most bitter winters awaits a warmer spring and summer.

But without doubt a curtailment of gas exports from Russia will have an upward effect on values. From Buffett’s lips to the investment heavens above? How EFH must be pleading for US and European gas import sanctions.

Either way, my skepticism of Warren Buffett has softened—a bit. I admit part of the guy’s tongue must be gilded.

It’s too much to theorise of course, that a phone call from the world’s greatest investment guru to Putin, sent the latter’s military into Simferopol:

Vlad, the Texans need a hand.

But it’s a dizzying, if not highly entertaining, thought to juggle around.

How close did Buffett come to avoiding his $873m loss? Like Napoleon after Borodino, was he beaten at the gates of Moscow by the weather?

© 2014, 2022 Adam Parker.