Ukraine’s president: ‘Stalemate is not an option’

This is an audio transcript of the FT News Briefing podcast episode: Ukraine’s president: ‘Stalemate is not an option’

Marc Filippino
Good morning from the Financial Times. Today is Wednesday, June 8th, and this is your FT News Briefing.

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Ukrainian President Volodymyr Zelenskyy headlined an FT conference yesterday. He said this.

Volodymyr Zelenskyy, via interpreter
First of all, stalemate is not an option for us.

Marc Filippino
He praised and criticised his Western allies and the chaos in the nickel market has led to lawsuits. Plus, our Swamp Notes editors share their thoughts on President Joe Biden and Democrats as the US heads towards the midterm elections. I’m Marc Filippino and here’s the news you need to start your day.

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Ukraine’s president, Volodymyr Zelenskyy, says a stalemate with Russia is not an option. Zelenskyy was speaking through an interpreter to FT editor Roula Khalaf yesterday. He appealed to Western powers for more military support, but he also criticised what he sees as efforts to explore a ceasefire without involving Kiev.

Volodymyr Zelenskyy, via interpreter
To find a way out from the stalemate. We need a abiding interest from the West, West and supporting Ukraine’s sovereignty and our position. There cannot be some talks behind Ukraine’s back and the kinds of expectations from certain countries that we are going to weaken our position. We need to wait or perhaps Ukraine is going to be distressed economically or perhaps Ukraine is going to be destructed infrastructurally and then perhaps Ukrainians will be willing to accede some concessions. But we have already lost too many people simply to cede our territory. That is not possible.

Marc Filippino
That’s Ukrainian President Volodymyr Zelenskyy speaking through an interpreter at the FT’s global boardroom conference.

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About two weeks after Russia invaded Ukraine, the price of nickel skyrocketed to a record $100,000 a tonne. When that happened, one of the world’s most important metal trading hubs, the London Metal Exchange, shut down and it cancelled the day’s trades. You heard that right. It erased the trades. There was an uproar. We covered it on the show. And our markets editor, Katie Martin, described it like this.

Katie Martin
So this is what I’m calling the great nickel pickle.

Marc Filippino
Get out.

Katie Martin
(Laughter) Listen Marc . . . 

Marc Filippino
Make sure you trademark that, please. That is amazing.

Katie Martin
I’m trying to make it stick.

Marc Filippino
Traders were probably not laughing, though, especially those who stood to gain a lot of money. And now a big US hedge fund, Elliott Management, is suing the LME for more than $450mn, saying the move was unlawful. Another Wall Street firm, Jane Street, has also filed a lawsuit. The FT’s Neil Hume lays out the likely response from the London Metal Exchange.

Neil Hume
The LME is going to argue that this was an unruly market. There was nothing else it could do but suspend trading. Now, of course, Elliott will argue that the LME actually overstepped its powers in counselling the trades and actually exercised them unreasonably and irrationally. And that could be a nod to the fact that the LME is ultimately owned by Hong Kong Exchange and Clearing. And of course the sort of the counterparty that was gonna lose a lot of money when the nickel price went up was obviously a big Chinese stainless steel producer. So that’s where the case is gonna hinge, I think.

Marc Filippino
Makes sense. So, Neil, could the LME’s decision to cancel the trades and the uproar that followed, could this lead to any changes?

Neil Hume
Yes. I mean, I think I mean, ironically, one of the things that we might see come out of this whole sort of crisis is greater changes that the LME, indeed the chief executive, Matthew Chamberlain, has been trying to push through changes to make the exchange more transparent, put in new rules. And he indeed wants reporting of these sort of over the counter derivatives trades that played a big part in this whole scandal. So, yes, I mean, I think this will sort of give the people who want to reform the LME and make it a sort of a less archaic exchange into something more modern, you know, greater leverage to do that. And indeed there is also reviews going on from the Bank of England and the Financial Conduct Authority. So I think what will emerge from this whole crisis is a very different LME. And an arguably one that’s more modern and fit for sort of a kind of digital electronic age.

Marc Filippino
Neil Hume is the FT’s natural resources editor.

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The US midterm elections are still five months away, but that’s basically right around the corner when you’re talking about American politics. This election is especially important because it’s a referendum on President Joe Biden and the economy. I’m joined now by the FT’s national editor and columnist, Edward Luce, and our global business columnist, Rana Foroohar. They also write the FT’s Swamp Notes newsletter. Thanks for joining me, guys.

Rana Foroohar
Thanks for having us.

Edward Luce
Great to be here.

Marc Filippino
So the US is dealing with historic inflation, gas prices not seen in a decade and an incredibly tight labour market. Rana, how worried do you think Democrats should be going into the November midterms?

Rana Foroohar
Well, in two words: very worried. And inflation in particular is something that just politically is gonna be really, really hard to message away. But I have to say, I want to give a shout out to both the Treasury secretary, Janet Yellen, and the president, because a lot of times in a situation like this, there’s a blame game. Janet Yellen recently stood up and said, hey, I got it wrong. I thought it was gonna be lower. It’s a little higher and we’re going to course correct. I also like the fact, frankly, that the president is saying, you know what, inflation is a big deal. The Fed should fight it with all guns, even if that means a market correction that’s gonna be not great for him in the midterms and in the presidentials.

Marc Filippino
So Ed, is there anything that Biden and the Democrats can do, either message wise or policy wise, in the next few months?

Edward Luce
In terms of messaging, it’s very difficult for Biden because he’s done the right thing. He met Jay Powell, the chair of the Fed. He said, you’re independent. You’ve got to do what it takes. I’m not gonna interfere. And that does mean higher interest rates. It does mean there’s gonna be a continued slowdown, housing and rent are gonna get more expensive. And Biden’s going to have to be talking quite responsibly on the need for a soft landing slowdown being the best in the best interests of all Americans. And that’s quite a hard message to sell, ‘cause you’re not selling a chicken in every pot. You’re selling responsible stewardship.

Rana Foroohar
Well, you know, it’s interesting. If you put the US in a global context, we’re still the cleanest dirty shirt in the closet or the prettiest house on the ugly block, whatever metaphor you want to use. And frankly, I would have expected by this point, for a variety of reasons, a much bigger stock market crash. I think we haven’t gotten that in part because there’s a war in Europe. China has struggled with its Covid-zero policy and the fallout from that. And so you still got a US that by global standards is, you know, doing pretty well, even though it doesn’t feel good to a lot of people. So that’s something that he can message.

Marc Filippino
So any final thoughts on President Biden and the economy? Rana, why don’t you go first?

Rana Foroohar
I’m a little worried, Marc, about buying strikes for unnecessary items. You’re starting to see consumers say, what do I absolutely need to live? I need to fuel my car. I need to buy food. I need to pay my rent. Everything else, maybe a little expendable. And that’s starting to hurt corporations. That then has a knock-on effect in the stock market. And when companies then start cutting back, that affects jobs, so on and so on, you get a snowball effect. So that’s something I’m watching pretty carefully.

Edward Luce
Well, I think we shouldn’t overlook the January 6 committee’s televised public hearings into the Trump’s failed putsch of January 2021. It’s not inconceivable this could change some of the electorate’s sort of view of what’s at stake in November.

Marc Filippino
Rana Foroohar is the FT’s global business columnist, and Ed Luce is our US national editor and columnist. They write the FT Swamp Notes newsletter. FT premium subscribers can sign up to get Swamp Notes every Monday and Friday. We’ll have a link to that in the show notes. Thank you for your time, guys.

Rana Foroohar
Thanks so much, Marc.

Edward Luce
Thank you.

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Marc Filippino
You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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