The US-China war over Taiwan may already be lost

Plus: Putin under pressure. [Bloomberg]( Follow Us [Get the newsletter]( This is Bloomberg Opinion Today, a Ground Combat Vehicle of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - The US [isn’t ready for war with China](. - Putin [isn’t ready to mobilize](. - Wall Street [isn’t ready for a recession](. - Europe [isn’t ready to build wind power](. When $801 Billion Isn’t Enough When you see a chart like this, it’s easy to assume the US would have no problem trouncing China or anybody else in a war: After all, spending is strength, as the brands are always telling us. But as anybody who has ever ridden in a US Army [Ground Combat Vehicle]( can tell you, not all defense money is spent wisely. (Fun fact: Nobody has ever ridden in a US Army Ground Combat Vehicle.) And in an actual war, military power becomes subject to [stock versus flow]( issues. Yes, the US military has spent bajillions on expensive weapons systems. But when the shooting starts, [all of those pricey blow-’em-ups tend to blow up]( at an alarming rate. There’s no better example right now than the Ukraine war, Hal Brands notes. Artillery shells, missiles, tanks and other materiel are dematerializing almost too quickly for Russia and the West to keep up. Now imagine a much more evenly matched war — say, one between the US and China over Taiwan. The difference in such a conflict may come down to who can replace their equipment the fastest, Hal writes. Once upon a time, in World War II, the US had a wide lead over the rest of the world in this skill. But its economy was heavily industrialized then, and it still took years to fully militarize. Today the US economy is based mostly on lattes and vibes, while China is still the world’s factory. And though it hasn’t spent as much as the US, it’s been cranking out war machines. President Joe Biden last night [suggested]( the US would defend Taiwan against a Chinese invasion. But unless he starts preparing now, the war will probably be lost before it even starts. Read the [whole thing](. Bonus New Cold War Reading: China is [flooding the world with propaganda](. — Adam Minter Everybody Puts Putin in a Corner China will also have the benefit of watching and learning as its client state Russia pratfalls through Ukraine like the Three Stooges at a construction site. After nearly seven months of failure and war crimes, Vladimir [Putin is running out of friends abroad and at home](, Clara Ferreira Marques writes. Nationalists are pushing him to press more of his citizens into the fight, but that will make him even more unpopular — maybe regime-endingly so. Full mobilization also won’t be easy, and at this late date it might not even be effective. Turns out invading a country for no good reason is a bad idea! Wall Street’s Glass Is Half Full and Also Half Empty We’ve used Schrödinger’s cat half to death (get it?) in this newsletter, but here we go again. John Authers writes Wall Street is [just about evenly split between a camp of bulls]( — who see the Fed landing the economy gently and easing off on rate hikes next year — and bears, who see the opposite of that. We exist in a quantum superposition of economic eigenstates ranging from “We were all worried for nothing” to “Time to load your belongings in a grocery cart.” It will be fun watching this wave function collapse! And by “fun” I mean “you might regret getting that [back kitchen](.” Jonathan Levin suggests Wall Street should at the very least start to [hedge for the worst by cutting earnings estimates](, which it hasn’t gotten around to yet. Look, Wall Street has been dealing with a lot, OK? Goldman took away the [free coffee](, for God's sake. But the market may soon have to wake up and smell the possibility of a recession, however unpleasant that might be. Bonus Markets Reading: The [Treasury market is still vulnerable to seizure](, and it will take more than clearing to help. — Paul J. Davies Telltale Charts As you may have heard, Europe has a bit of an energy problem. Which makes it even more baffling and self-defeating that it[drags its feet so badly on building wind farms](, Chris Bryant writes. Crypto, SPACs and meme stocks are so 2021. The hot new investment this year is [small-town sewer systems](, Liam Denning writes. It’s not always 100% clear what private buyers get out of these utilities, but it’s a safe bet customers will be paying more.   Further Reading Recent [action to regulate “ghost guns](” is another example of Biden’s quiet progress on firearms. — Bloomberg’s editorial board The [free market took away Black freedom]( before the civil-rights era and can do so again with any of us. — Trevon Logan Is crime really bad? Who knows? [We have shockingly little data](. — Matt Yglesias The [best way to limit late-term abortions]( is to make earlier ones easier to get. — Sarah Green Carmichael Opendoor learns the hard way that [market making in houses is a bad business](. — Matt Levine Online savings accounts are [actually high-yielding now](. — Alexis Leondis All the pageantry of the [queen’s funeral is a recent invention](. — Adrian Wooldridge ICYMI Mark Zuckerberg is now [$71 billion less wealthy](. TerraUSD founder Do Kwon is at risk of [getting an Interpol “red notice](.” Watch [mortgage payments surge]( in 10 cities. Kickers Computers have [turned chess into poker](. Your kid is probably [afraid to ask you for help](. Will water ever [return to the Aral Sea](? Aleksandr Sorokin [ran a record 199 miles]( in one day. Notes:  Please send red notices and feedback to Mark Gongloff at mgongloff1@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Opinion Today newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( [Ads Powered By Liveintent]( | [Ad Choices]( Bloomberg L.P. 731 Lexington, New York, NY, 10022