Spetznaz Block Suggests Putin Prefers Lyman Pocket Death Fight To Retreat

Units of Russia's 144th Motor Rifle Division trapped in the Lyman salient are in growing danger of being encircled by Ukrainian forces. There is one bridge which would allow either reinforcements in or escape out. But the Kremlin evidently sees there is no point in sending any more of its depleted army into the pocket - and a Spetsnaz blocking company is not letting anyone out.

This suggests that Putin prefers to have the trapped soldiers continue fighting to the death, rather than suffer the humiliation of a major retreat. Ukraine appears happy to oblige. JL

Shankar Narayan reports in Medium:

Ukraine  is now methodically eating away at the Lyman salient, which Putin’s forces took more than a year to build. A number of  Russian units are caught in the Ukrainian sweep. A significant share belongs to the 144th Motor Rifle Division. The Terny crossing is the only vehicle exit across the Zherebets River. There is one usable bridge, and the 29th Spetsnaz Company is positioned at its eastern exit. Ukraine could have destroyed the bridge but has not. That suggests Ukraine wants to preserve it. Why is Russian spetsnaz company guarding the exit when no reinforcements are crossing the bridge in the other direction?  The depleted regiments inside remain where they are. Stalin would understand this immediately. There has been no reinforcement of this pocket. If Russian commanders have refused to reinforce this sector even as Ukrainian forces move deeper into it, Moscow has given up on holding the salient. It looks as though Putin has abandoned the 144th Motor Rifle Division.

Russia's Desperate Race To Replace Starlink Is Faltering

The Kremlin is desperate to replace the Starlink system it is no longer able to use with one of its own. but that effort is faltering due to two sets of problems. 

The first is that the Russians have not been able to achieve the necessary operational altitudes for the Rassvet satellites. These are problems which may, in the future, be corrected with additional development work, but Kremlin pressure to produce a working system immediately appears to be undermining the process in the long term. This challenge has been compounded by Ukrainian drone and missile attacks on the Russian factories that produce the electronic components and rockets necessary to launch and guide the system, adding to the expected delays in deployment. JL

Brendan Cole reports in Newsweek:

Russia is rushing to launch satellites called "Rassvet" to replace Starlink after it lost access to the SpaceX-owned network but Moscow’s version continues to hit snags, with none of the 16 Rassvet satellites launched on July 19 reaching an altitude of 340 miles, short of the intended 540-mile operational altitude, with many only reaching180 miles; some are experiencing orbital decay, and two are heading for reentry into Earth’s atmosphere. “It seems the rate of malfunction has been higher than Starlink’s first gen rate of failure.” The failure of all 16 satellites from its second launch to reach operational altitudes suggests Moscow was not ready to roll out the constellation. "Russia may have been unprepared to deploy at this pace and will likely face additional delays." Adding to Russia's woes, on August 15, Ukraine struck the Space Center in Samara with cruise missiles, targeting the only factory to assemble the Soyuz-2.1b rockets used to launch Rassvet satellites.

Ukraine's "Massive" Dobropillia Counterattacks Stop Russian Fortress Belt Advance

As reports grow about Russia's attempted assault on Ukraine's Fortress Belt having stalled, the reasons are becoming clearer. Ukrainian forces have launched 'massive' counterattacks in several sectors, including Dobropillia, which have disrupted the Russian plans.

Already suffering from war-high casualties and faltering recruitment of new replacements, the Russian units on the front are unable to defend effectively against the aggressive and opportunistic Ukrainian efforts. The result is that Russia cannot muster sufficient mass to hold off the Ukrainian attacks while also attempting to advance on a heavily fortified and defended series of strong points. This series of combined obstacles has resulted in the summer's failed offensive plan. JL

RFU News reports:

On the Pokrovsk front, the Ukrainians have launched a massive counterattack. Russian sources report they are facing a wave of Ukrainian counterattacks along the frontline in the Dobropillia sector. Ukrainian assault groups are clearing out Russian infiltrators in the northeastern and eastern parts of the city. If Russian infiltrators cannot consolidate and their logistics are disrupted, Ukraine can push them away from the city. (And) if Russian advances stall here, they cannot encircle Sloviansk and Kramatorsk 

Russian Troops Increasingly Surrender To Ukrainian Aerial and Ground Drones

Ukrainian forces capitalizing on Russian troops' fear of drones by guiding attack drones towards groups of Russian soldiers, then, at the last minute, sending another drone with a loud speaker to offer them the chance to surrender, which increasing numbers do.

Ukraine's drone operators see the fear and exhaustion on the faces of the frequently under-supplied Russian troops and so play on that psychological disadvantage. They have even dropped leaflets and posted videos on social media channels popular with Russian troops, explaining to them how to surrender to a drone. Hundreds have reportedly done so. JL 

Harry Thompson reports in The Daily Beast:

Putin's troops are surrendering to drones. Ukraine has become a world leader in drone warfare, and is now using that expertise against Russian troops in an effort to force them to surrender. Last winter, some 100 Russians surrendered to drones, according to former Ukrainian Defense Minister Mykhailo Fedorov. "We see their anxiety, because the camera captures a lot. We see their faces. You see how they tremble, how they worry, how scared they are."  said a Ukrainian drone operator. Ukraine has capitalized on that fear. After observation drones spot troops and guide attack drones onto them, the final stage is to break the will of the exhausted troops and get them to lay down their arms. To do this, another drone fitted with a loudspeaker offer troops—many of whom are injured or have watched their comrades die—the opportunity to surrender. "Establish eye contact with the drone," and then "Lay down your weapon. Raise your hands. Show that you want to surrender." 

Big Tech's Profits Inflated By Billions In One-Time AI Company Investments

Let's be clear: Silicon Valley and Wall Street are both having a very good year. But merely historically high operating earnings don't seem to be enough. So in addition to those results, they are adding 'other income' which is primarily the run-up in equity stakes they hold in AI companies like Anthropic and SpaceX.

There is nothing illegal about this, but without explanation, it is misleading for the simple reason that such gains are non-recurring. That means they are one-time which cannot be assumed to happen again. The problem here is that as the economy becomes more dependent on AI despite all of the warning signs that the soaring bull market is approaching overvaluation - if it has not already passed that mark - it is crucial that investors and policy makers have an accurate sense of what the actual financial picture is. Conflating operating results with one time gains in a narrowing and possibly overinflated segment of the global economy is a recipe for an unpleasant surprise. JL

Jonathan Weil reports in the Wall Street Journal:

Last quarter, "other income" at Amazon and Alphabet totaled $121 billion combined after taxes, almost all of it from investment gains. Other income was 71% of Alphabet’s quarterly profits and 66% of Amazon’s from revaluing equity holdings, which include SpaceX and Anthropic. Amazon’s primarily arose from its stake in Anthropic. Alphabet’s portion is on track to represent about 10% of second-quarter earnings for the S&P 500, and Amazon’s share another 5%. These are unrealized paper profits, and they are inherently nonrecurring. Even including these gains, the S&P 500 looks expensive at about 27 times trailing earnings. The historical average is about 16 times. Counting gains in volatile equities when they go up while subtracting everyday operating costs isn’t analysis. It’s marketing, which of course is what Wall Street is all about. Investors beware.

"They Will Hang Me:" Cornered, Putin Fears Ending Ukraine War Without Victory

Putin has always been a high stakes gambler. At this point, he must know that his military is incapable of delivering a battlefield victory. But negotiating without having achieved even his minimum possible goal - taking all of Ukraine's Donbas - is probably a death sentence for him. 

So one option is to escalate or, as he has done in the past, to threaten escalation by taking more aggressive and provocative actions like sabotaging European manufacturing sites. The problem he faces is that his military's failure to subdue Ukraine makes it less believable that he can take on NATO successfully. Thus, destabilizing acts and tough talk, remain his best card for now, if only to help stifle  rising Russian public discontent. JL

The Economist reports:

Putin's key objective has always been preserving his own power, and ultimately his life. One concern for the Kremlin is the evaporation of the public’s silent assent for the war. Deep strikes by Ukrainian drones on refineries and e-retailers, along with internet restrictions, have shattered the veneer of normal life. Public trust in television propaganda is falling, and young people post calls to end the war on social media. Mr Putin’s approval rating is sliding. The mood among elites is even more sour. The biggest issue is not so much the economy or the lack of military success but whatever the outcome, nearly five years is a failure. He believes ending the war without achieving even his minimum goal, taking all of Ukraine’s Donbas, would put him physically at risk. (“They will hang me”). All this might make escalation seem attractive.

Russia's 51st Army Donetsk Military HQ Destroyed By Ukraine Cruise Missiles

This story is significant for two reasons. First, that Ukrainian intelligence identified the presence of Russia's 51st Combined Arms Army, the formation that is running the Kremlin's fighting in the Donbas area and may have killed him along with several of his top officers. 

But second, that Ukraine deployed a number of cruise missiles - as many as six by some accounts - to accomplish the mission, and that they were probably a combination of French and US munitions, suggesting that supplies of those weapons from NATO sources are continuing and making an impact. JL

Stefan Korshak reports in the Kyiv Post:

The main and reserve Russian command posts in the Donetsk area were struck in a decapitation strike against the commander and senior staff of Russia’s 51st Combined Arms Army, the major Russian formation for the war in eastern Ukraine. Images of debris pointed to French-made SCALP cruise missiles, while a second target had been hit with a new US-made JDAM-LR precision weapon. The strikes came without air raid warnings and detonated within several minutes of each other. Lt. Gen. Sergei Milchakov, commander of the 51st Combined Arms Army, was holding a meeting at the site and was reported killed along with several deputies, though that has not been confirmed.