Putin does not look so clever now

It’s now pretty clear that Putin’s game plan (planned for years) was to encircle Ukrainian troops in Donbas, take out key military and economic infrastructure, encircle Kyiv and Kharkhiv and assume Zelensky would throw in the towel, Ukrainian troops would not fight and the Western sanctions response would be muted. I think he also planned to install a puppet regime in Kyiv.

He has been spectacularly wrong on all counts.

First Zelensky has proven a brave and capable war leader. He has won the international info war appearing as the David to Putin’s Goliath.

Second, Ukrainian troops and society have fought bravely and against overwhelming odds. But anyone who knows anything about Ukraine always knew that would be the case. These are the people who staged two revolutions against injustice and repression, and fought Putin for seven years in Donbas suffering 15,000 dead as a result. And it just shows Putin does just not get Ukraine nor Ukrainians. He never has but they are fundamentally different in that they value and are willing to fight and die for freedom.

Even if Ukraine loses the conventional military battle, eventually, Ukrainians will fight on. This will impose a huge burden on Russia for years to come. Huge cost in Russian soldiers blood and Putin’s treasure.

It begs belief that Putin thought he could invade and that somehow Ukrainians would welcome Russian troops with open arms. Winning the war might be the relatively easy bit for Putin winning the peace will be impossible and likely will bring Putin down. Ukraine will be his Afghanistan, Iraq et al. He is going to pay for this conflict for years to come - so much for the tactically brilliant Putin. He made a rookie mistake by failing to bother to understand his opponent.

One thought on Zelensky and the political leadership in Ukraine. One benefit of Ukraine’s hotly contested political landscape is a multitude of leaders who will continue the fight if Zelensky is killed - Poroshenko, Klitchko, Tymoshenko, Yatsenyuk, Avakov, Yermak, Sadovy, there is a long list list of people ready and able to lead the struggle. Ukraine is United against Putin. So this idea of cutting off the head is just another miscalculation - he is just creating more martyrs and greater hatred of him and willingness to fight.

Third, on sanctions I think Zelensky’s plucky, bravery has won over the World and shamed the West into finally pulling its finger out to support Ukraine and sanction Russia. More weapons even from the Germans now - let’s hope not too little, too late.

But on the sanctions front all major banks sanctioned, SWIFT done, the CBR sanctioned. I hope JP Morgan and BAML put their ESG mouths where they fat wallets are and kick Russian securities out of investment indices.

I was talking with a transactions manager at a global internet distribution platform yesterday and he said they are already cutting Russia out of all their systems, banks and international business will be the same.

The Russian economy and markets will be toast because of this. Who in their right minds would invest in Russia or transact business with a pariah regime like Putin? And the CBR will now struggle to access a weight of its $640bn reserves to defend the rouble. Russians surely will worry about the value of the ruble and the safety of their bank deposits. The CBR will have to respond next with massive policy rate hikes which will further crimp investment and growth.

S&P downgraded Russian sovereign ratings on Friday - I expect more and multi notch downgrades over the next few weeks.

Cannot help feeling here that Putin has spectacularly miscalculated and will pay the price eventually by being forced from office. Thousands of Russian mothers will be grieving the loss of their sons. Russian will see their living standards drop and their savings melt. When they travel, if they can still travel given air flight and airline bans