Putin Blinks: Rattles the Sabres but the Russian Market Crash May Have Been Too Much

I'm sure Putin is motivated by all sorts of delusions of grandeur but maybe his portfolio (or the portfolios of his ex-KGB cronies) got him to stand down.

Although Putin doesn’t really have much to fear in terms of retribution for making mistakes within his own country, the markets were giving him a different story, as Russia’s MICEX (MICEXINDEXCF.ME) index tumbled a whopping 10.8% yesterday. Recovery in markets abroad, and here in the states (^GSPC, ^DJI), have essentially brought us back to the status quo, something which Zachary Karabell of Envestnet felt was the most likely scenario.

Or conversely maybe he had a massive short trade on and made a quick 10.8% on his billions by essentially using his military to scare the markets. I have a feeling that the MICEX version of the SEC is not as powerful in Putin's Russia so that kind of chicanery might be possible. He probably has money in the US Stock market as well and had a chance to catch the downward move and the recovery as well.

Putin also had a chance to take the temperature of the world while playing the "Great Game" to rebuild a Russian Empire. He pretty much invaded his neighbor using Hitler's Austrian Gambit (I'm protecting ethnic Germans I mean Russians) and all the world did was condemn it in the strongest possible terms.

There were no economic sanctions or aircraft carrier movements by the US. The EU just stamped their feet and did not come to the financial or military aid of the Ukranians. The UN didn't censure him or do much of anything substantial. Putin could have ordered his troops to seize the country and annex it and there would have been no real consequences by the rest of the world.

Now if he is as devious as I think he is, Putin's next plan would be to partition the country using the UN as a tool. His excuse will be "protecting the interests of the Russian minority." Then he creates a satellite of the eastern half of the country with a puppet strongman in place. After all, getting half of a country for free is better than a war of aggression for the whole thing. All the satellite countries but none of that worthless rebuilding that the US has to do all the time.

Russia has loved a buffer zone of countries between it and Europe going back to Peter the Great. So Putin the Great (or Putin the Terrible?) is forming his own in 2014. It is sad that Putin is playing chess in the "Great Game" and the rest of the world is playing Chutes and Ladders.