Putin Will Never Back Down | Institutional Investor’s Alpha

Excellent analysis of the situation in Eastern Europe by Bill Browder, founder of London-based Hermitage Capital Management:

I’m afraid that, based on the reasons behind Putin’s motivations for invading Ukraine in the first place, there is no chance that he will back down. To understand this, all it takes is a simple analysis of how this crisis unfolded.

First, Putin didn’t start this war because of NATO enlargement or historical ties to Crimea, as many analysts have stated. Putin started this war out of fear of being overthrown like Ukrainian president Yanukovych in February 2014. Yanukovych had been stealing billions from the state over many years, and the Ukrainian people finally snapped and overthrew him. Compared with Putin, Yanukovych was a junior varsity player in the field of kleptocracy. For every dollar Yanukovych stole, Putin and his cronies probably stole 50. Putin understands that if he loses power in Russia, he and his underlings will lose all the money they stole; he will lose his freedom and possibly even his life.

I believe that Bill is right. Putin was not reacting to EU or NATO encroachment (they were never a threat), but to Maidan. Especially when we read Michael McFaul’s (former ambassador to Russia) summation of Putin: “He is obsessed with the CIA…..With respect Ukraine he believes the US led the coup in the Ukraine. The Ukrainians had nothing to do with it. It was all the CIA.”

Former Ambassador to Russia Michael McFaul

….. Putin has never dealt with economic chaos before. Though some may argue that this will bring him to the table to negotiate with the West, in my opinion any negotiation would be seen as a sign of weakness and is therefore the last thing Putin would want to do.

Putin’s only likely response is to escalate in Ukraine and possibly open up new fronts in other countries where there are “Russians to protect.” But doing so will only harden the sanctions, leading to further economic pain in Russia — and further military adventures to distract Russia’s people from that pain.

I cannot imagine a scenario in which there is any compromise, because for Putin compromise means being overthrown. Judging from all of his actions to date, he is ready to destroy his country for his own self-preservation.

We should start preparing ourselves for a war in Europe that may spread well beyond the borders of Ukraine. The only Western response to this has to be containment. This all may sound alarmist, but I’ve spent the past eight years in my own war with Putin, and I have a few insights about him that are worth knowing.

In Putin’s mind, he is fighting for survival. The US/EU/Nato and Ukraine are just a convenient scapegoat. His real enemy is the Russian people. This 1945 image of Benito Mussolini, his mistress Clara Petacci, and three others hanging outside a petrol station in Milan must haunt his dreams.
Bodies of Benito Mussolini, his mistress Clara Petacci, and three others hanging outside a petrol station in Milan

When they realize they have been duped, the anger of the Russian people will be palpable.

Read the full article at Unhedged Commentary: Putin Will Never Back Down | Institutional Investor's Alpha.

Russians see war cost as their army invades

From Oleg Sukhov:

While previously Russia mostly sent fighters who had been formally discharged from the military or on official leave, earlier this week an invasion of eastern Ukraine by the regular Russian army began, making it much harder to hide the truth. …On Aug. 26 Ella Polyakova, head of the St. Petersburg Committee of Soldiers’ Mothers, said that hospitals in Rostov-on-Don and nearby regions were filled with injured soldiers.

Valentina Melnikova, head of the Union of the Committees of Soldiers’ Mothers, said on Aug. 27 that about 15,000 Russian soldiers, including both mercenaries and the regular army, were currently fighting in eastern Ukraine. She lambasted the authorities for hiding the truth and effectively denying assistance to the killed soldiers’ families, comparing it to similar situations during the Soviet invasion of Afghanistan and the first Chechen War.

On Aug. 27, the Stavropol Committee of Soldiers’ Mothers published a list of 400 killed and injured Russian troops.

These people are as much victims of an authoritarian Russian regime as the people of East Ukraine.

Read more at Russians see war cost as their army invades.