Putin Escalates

Vladimir Putin appears poised to escalate the conflict in Ukraine.

Following a string of embarrassing setbacks on the battlefield, and amid speculation the Kremlin intends to use hastily arranged referendums in occupied territory as a justification for nuclear threats in the event Ukrainian forces attempt to retake those areas too, Putin on Wednesday ordered a partial military mobilization.

In a prerecorded address to the nation, Putin accused the West of “nuclear blackmail.” He was visibly agitated. The West, he claimed, is encouraging Volodymyr Zelensky to “transfer military operations” to Russian territory, in order to “completely plunder our country.”

As is often the case with both official Kremlin messaging and state media in Russia, Putin projected his own behavior on his adversaries. NATO, he told Russian citizens, has raised “the possibility and admissibility of using weapons of mass destruction against Russia — nuclear weapons.” In fact, it’s Putin who’s repeatedly made veiled threats about the prospect of deploying nuclear arms, and not just in the context of the war in Ukraine. He does it habitually.

Some Western observers worry referendums in Luhansk, Donetsk, Kherson and Zaporizhzhia, scheduled to begin later this week, set the stage for Moscow to defend the occupied territory as though it were a part of Russia, which, in a worst-case, could entail the use of more destructive weapons against Ukrainian cities. Russia recognized the “independence and sovereignty” of Luhansk and Donetsk in February, just days before the invasion. The West regards all Russian-held territory in Ukraine as illegally occupied. Russian losses in Kharkiv threaten supply routes for the Russian frontlines in Donetsk and Luhansk, which likely explains the sense of urgency in Moscow.

Putin on Wednesday repeated his own narrative about the war. Russia, he insisted, is in Ukraine as a liberator for those who don’t wish to live “under the heel” of the Zelensky government, which he again called a “neo-Nazi regime,” bent on pursuing a “policy of intimidation, terror and violence” against its own people. Putin (ludicrously) accused Zelensky of perpetrating a “massive, horrific, barbaric” campaign against Ukrainian citizens.

Putin’s assertions have no basis in reality. None whatsoever. His remarks on Wednesday were pure, unadulterated fiction, and reflect a man lost in his own historiographic fantasy. Unfortunately, many Russians are likewise lost, unable to distinguish between fact and fiction, in part because Russian state television is, as Masha Gessen put it in a great piece published in May, “an army, one with a few generals and many foot soldiers who never question their orders.” Consider the following excerpt from Gessen:

The Russian state and its propaganda machine form a feedback loop. Putin watches his own television and quotes it back to itself, the television amplifies the message, and so on. Messages can originate anywhere along this closed loop. On February 12th, Maria Baronova, a former opposition activist who went to work for RT’s Russian-language service in 2019, wrote a long, unhinged post on her personal Telegram channel, arguing that NATO and its allies should be “de-Nazified.” She soon heard from a senior editor who praised her post and encouraged her to write more like it. 12 days later, Putin announced the beginning of Russia’s invasion of Ukraine and declared that its goal was the “demilitarization and de-Nazification of Ukraine.” Baronova couldn’t find an instance of the term “de-Nazification” being used by Russians (not in reference to Germany) that preceded her Telegram post. The propaganda machine had been calling Ukrainians Nazis for years, but this word was novel; it had come to her following a fight with a Russian-speaking friend in the United States. “I pulled it out of my ass for that post,” she told me. “And then, when they were scraping together verbiage for Putin’s speech, they picked it up.”

That’s pretty astounding, albeit hardly surprising if you know anything about the feedback loop Gessen described. Note that a handful of popular web portals in the US are, willingly or otherwise, part of that same feedback loop.

Putin continued. “The majority of the people living in the territories freed from neo-Nazis are in the first place historical Novorossiya land,” he explained, veering off into a history lesson of his own construction. “We have no right,” he said, leaning forward in his chair, brow furrowed, glowering, with both hands on his desk, “to hand our loved ones to the executioners.”

To call this dangerous would be to materially understate the case. Putin made it clear that he’ll support the effective annexation-by-sham-referendum of around 15% of Ukraine’s territory over the next week, and he also suggested that Russia is indeed prepared to use weapons of massive destruction. “I want to remind you that our country also has various means of destruction, and in some components more modern than those of the NATO countries,” he warned.

Obviously, the Kremlin is concerned that Russia might lose the war outright absent a more concerted effort. Putin’s partial mobilization calls up 300,000 reservists to fight in the war. His allusion to deploying Moscow’s nuclear arsenal is also indicative of panic, but more importantly, the West should consider the distinct possibility that Putin is no longer a rational actor.

Over the past two weeks, I attempted, on several occasions, to communicate the risk of an imminent escalation from Putin in consideration of factors market participants don’t fully appreciate. With that in mind, I’ll leave you with two passages from an article published here just 10 days ago:

It’s important that market participants seeking to make sense of the conflict understand that Putin is in the final stages of a decade-long transformation from cynical KGB kleptocrat to delusional ideologue. This descent began in earnest sometime around 2012, and although Putin’s deep suspicion of the West and profound distrust of NATO is routinely cited (including by Putin himself) as a justification for Russian military projection, the quest to conquer Ukraine is a manifestation of an imperialist fever dream cobbled together from various sources ranging from the wholly legitimate to the lunatic.

Zelensky claims Ukraine’s aim is to liberate the entire country from Russian occupation. If, against the odds, such an outcome began to seem even a semblance of likely, it’s difficult to overstate how psychologically devastating that would be for a man (Putin) experiencing a kind of identity crisis disguised as a cultural awakening. That poses significant escalation risk, and I’m quite sure markets aren’t priced for it because virtually no one who operates in them (markets) understands the nuance.


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34 thoughts on “Putin Escalates

  1. “more importantly, the West should consider the distinct possibility that Putin is no longer a rational actor.”

    Your own previous article made it clear he’s not been rational for a long while. I guess he got tired of being rich, and dating ballerinas and, feeling his mortality, wanted to be remembered for more than being a cynical KGB kleptocrat…

      1. Not really. MAD certainly did not require anyone to be mad or even to feigning being mad. It just required players willing to burn the world to the ground rather than going quietly into that good night. Not a super rare attribute and nuclear standard response tends to be semi-automated to even deal with the idea that maybe one of the player would be willing to let the other guy win, if the nukes started to rain down.

      2. A really great source about the conflict is ISW with a daily update that provides news and analysis and gives you a link to where they got every piece of info. Their stuff usually shows up in big media outlets several days later. Highly recommend it. They think we get Putin’s nuclear messaging wrong in this instance: “Putin emphatically did not say that the Russian nuclear umbrella would cover annexed areas of Ukraine nor did he tie mobilization to the annexation. He addressed partial mobilization, annexation referenda in Russian-occupied areas of Ukraine, and the possibility of nuclear war in his speech—but as separate topics rather than a coherent whole. The fact that he mentioned all three topics in a single speech was clearly meant to suggest a linkage, but he went out of his way to avoid making any such linkage explicit.

        Putin framed his comments about the possibility of Russian nuclear weapons use in the context of supposed Western threats to use nuclear weapons against Russia. He claimed that Western officials were talking about “the possibility and permissibility of using weapons of mass destruction—nuclear weapons—against Russia.” He continued, “I wish to remind those who allow themselves such statements about Russia that our country also has various means of attack…” https://www.understandingwar.org/backgrounder/russian-offensive-campaign-assessment-september-21

        1. … except that, to my knowledge, no one in the West has talked about first use wrt Ukraine.

          We refused to implement a no fly zone and to give Ukrainians long range missiles to make sure Russia knew we/NATO were not directly attacking it. If Putin still insists we’re declaring war against him and threatening nuclear war…

    1. I believe Putin is pathological. But that doesn’t mean he’s incapable of calculation. I also believe he wants you to think he is crazy and dangerous. Even if it’s true that Putin is not a rational actor, the west has to react rationally in response. We can’t merely be afraid of him.

      As we speak, the war in Ukraine is changing for Ukrainians, who are effectively defending themselves against Russian invaders. We in the west have also been impacted. But risks associated with the flow of oil products around the world, and the uncertainty and inflation it inspires, are only the beginning.

      The inept Russians and their leadership are running out of methods and tools to impose their will on Ukraine. Not to mention, Ukraine’s armies are humiliating Russia and its leadership by beating the hell out of the Russian army so badly that soldiers abandon their equipment and run away.

      In response, the Russians, whose only battle plan so far is using artillery on Ukrainian Army positions and dropping missiles on civilians in crowded cities, are backing themselves into a corner. The absence of imagination and tools on the Russian side leaves them speaking more loudly and frequently about using nuclear weapons and limiting their choices for actually affecting battlefield outcomes. Putin is bluffing. But to these threats, and forthcoming changes in the battlefield, the United States and NATO must respond.

      As Putin announces the draft of 300,000 former soldiers to restore the viability of army ranks, it is now time for Biden and the NATO countries to stop pussyfooting around and give the Ukrainians everything that they need to stand up to the battlefield changes being made by Russia.

      It is becoming more urgent that the Ukrainians dominate the skies over Ukraine. They require greater anti-aircraft and anti-missile capability. They should be allowed tools to impose a no-fly zone. They should be fully enabled to blanket their skies with radar and greater numbers of Ukrainian aircraft. And at a minimum, and they should be able to defend themselves from any air attack with S-300s and S-400s, and any other western missiles that would be necessary to support their defense.

      There are rumors the US may already be training the Ukrainians in flying and servicing A10s and F16s. If not already in Ukraine, American advisors should be on the ground in western Ukraine to help with managing the logistics around the care and feeding of western equipment until the Ukrainians can do it themselves.

      The Ukrainians should be allowed to receive more robust battlefield tools, such as longer range HIMARS, and in much, much greater numbers. Ukrainian forces should also be enabled with greater conventional missile capability, including more missiles like those used to destroy airfields and ammunition depots in Crimea.

      Needless to say, the winter in Europe will be colder this year because some countries there will be lacking fuel to fully heat their homes. But if the United States and NATO do not expand the methods and tools available to Ukraine for defending itself and carrying on with Russia’s defeat, the deeper and more prolonged will be the consequences for all of us in the west.

      1. I’m not sure I agree with arming Ukraine with longer ranged weapons/aircraft.

        The weapons we’ve already supplied have proven to be more than capable at restoring conquered territory. I am in support of resupplying those weapons and delivering replacements as necessary.

        To increase Ukraine’s offensive ‘reach’ would give me pause. US missles/rockets landing in Moscow would most certainly be a game changer.

        1. Ukrainians have shown no interest in invading or attacking/seizing ground in Russia. They might want to target supply depots etc. but aren’t interested in more land and they aren’t the one saying Russia doesn’t exist and should be subsumed into a new Kyivan Rus’

          Still, I too would be careful with arming the Ukrainians “too much”. We got to respect the Cold War playbook. Whatever the Russians did for the VietCong and whatever the US did for the Afghans is far game (updated for technological progress) is fair game.

          OTOH, the West does need to think of a proportional response in case of nuclear weapons being used. Tactical nukes, whatever. We need to show we’re willing to strike back with proportional nuclear weapons too.

        2. I think market participants need to be prepared for the possibility that, at some point in the next six months, the US may be compelled to simply instruct him to leave Ukraine or risk direct US military intervention “at a time of our choosing,” so to speak. Annexing those territories will probably embolden the Ukrainian counteroffensive. It’s now very obvious that the Russian military isn’t capable of conducting a successful ground war against a well-armed adversary, and it’s the furthest thing from obvious that forcing another 300,000 reluctant Russians to fight in the mud, in the winter, for a cause they don’t understand, is going to work. At some point, the losses for Russia will be so large that Putin will have a hard time explaining them. At that point, he’ll either need to leave, humiliated, or escalate further. My guess is he’ll escalate further, likely using some sort of pretext. Everyone seems to be in denial about this (which is understandable), but if he uses a tactical nuke or chemical weapons, the US will intervene. There’s no question about it, or at least not in my opinion, which is at least a semblance of informed. The bad news for market participants is that there’s no way to hedge that. Not really, anyway. The good news is, he’ll have to back down. I don’t think the Russian military (or the oligarchs) will let him initiate the apocalypse. I really don’t. And the past seven months have made it abundantly clear that he’d be routed in a conventional war with NATO.

          1. I fully agree, Walt. Numerous voices coming out of Russia today in response to circumstances in Ukraine are nuts, straight-up! In most ways, Russia is substantially weaker than Germany was in the ’30s. The big difference is they’re nuclear, and they’re not shy about it.

            This is a very big deal, going beyond our daily discussions. Just got a note from the NY Times regarding an appeal being made by Biden to the UN. “If nations can pursue their imperial ambitions without consequences,” he said, the post-World War II order crumbles. “We will stand in solidarity to Russia’s aggression,” Biden said.

            I like that Biden made this statement to the UN. I believe Putin’s actions require a strong and rational response from the UN, not just NATO. But NATO’s continued help to Ukraine is also a correct response. The Ukrainians ought not to be required to endure the scourge of this psychopathic bully alone.

          2. Ever since the invasion I’ve hoped for Putin’s removal and voiced that hope on these pages. My question now is how anyone, or any group of oligarchs, can remove him. Putin is very insulated.

            We unfortunately must depend on variables in Russia, which are beyond our control. I wish we could know the extent to which the Russian military and the oligarchs actually have influence when it comes to checking Putin’s sanity or the quality of his decisions.

          3. “The bad news for market participants is that there’s no way to hedge that. Not really, anyway.”

            After Putin mobilized more troops to Ukraine:
            (1) Shares of consumer foods companies are jumping bigtime today.
            (2) Shares of defense companies are also much higher today,

          4. What counts as a “tactical” nuke? It’s a small nuclear weapon, to be used on some concentrated, presumably military target. There aren’t that many in Ukraine, as the front lines are pretty well dispersed. Using many of them is not like blowing up one baby a-bomb. And one over Kyiv is a strategic weapon. I’m trying to be somewhat rational here. I don’t know what Putin is thinking.

          5. I think you are right that we consider the “unthinkable”. But on the other side we might also entertain the possibility of what would happen if Putin was removed from power. I have never had any hope of the oligarchs having any ability to do that – not to mention the courage – but the gulf that is opening up between Putin and the Defence Minister Shoigu and the Ministry of Defence opens up real possibilities. It may be a case of assassination by necessity.
            “Putin has neither the time nor the resources needed to generate effective combat power. But Putin will likely wait to see if these efforts are successful before either escalating further or blaming his loss on a scapegoat. His most likely scapegoat is Defense Minister Sergei Shoigu and the Russian Ministry of Defense. Reports that Shoigu would accompany Putin while Putin gave a speech announced and then postponed on September 20 suggest that Putin intended to make Shoigu the face of the current effort.

  2. Maybe he is irrational but is everyone around him? His girlfriend, children, elites?

    They only understand strength and it is time to either call the bluff (which this probably is) or make sure everyone around Putin will suffer ultimate consequences for Putin. Maybe Putin wants to die (I doubt he does though losing may be akin to dying) but I highly doubt the elites want to as well.

    Just maybe a coup will then happen.

    I am just not sure how the elites or the average Russian is better off after every escalation Putin engages in. There life is much worse today than pre-invasion.

    When you are in a hole STOP DIGGING!!!

  3. While this is speculative, it is not far-fetched that the Trump WH sold out Russian oligarch’s who may have been being nurtured by CIA for a Russian future without Putin. Than so many oligarch’s are falling down the stairs or out their windows suggests the dictator may not just be paranoid, but is being helped by American traitors, eager to model the US after a failed state such as Russia.

    1. Or, should Putin’s latest be seen as a reply to Biden’s “misstep” on 60 minutes?
      Either way the situation in and around Russia and Ukraine is untenable.
      The west thinks a cold war will work. That doesn’t seem like a good idea.

  4. I saw a cartoon many decades ago that depicted a decimated landscape. In the forefront were two shirtless bearded men, crouched under the remnants of a structure. One man is looking at the other. The caption read, “There’s a rumor going around that we won”.

  5. He’s no longer rational. This isn’t an act. It’s not some kind of KGB psyop and it’s not game theory either. I (strongly) encourage everyone to read about the evolution of Putin’s thinking vis-a-vis Ukraine over the past 10 years, particularly as it relates to historiography.

    1. On the Turkish Airlines website:
      A search for one-way flights from Moscow to Istanbul shows flight availability on Wednesday, then not again until Sunday, with tickets costing 81,071 rubles ($1,322). By next Tuesday, that same flight is priced at 169,704 rubles.

      Flights to the Armenian capital, Yerevan, as well as to Istanbul (both Turkey and Armenia allow visa-free travel for Russians), also appeared to be sold out on Wednesday, Reuters reported. Media reports indicate that the cost of many flights have jumped.

      Reuters: Flights out of Russia sell out after Putin orders partial call-up

      No flights from Moscow to the Georgian capital, Tbilisi, were available, according to the Reuters report, which also noted that the least costly flights to Dubai were running more than 300,000 rubles.

      Putin made no specific announcement about border closures or restrictions on travel… YET.

    2. Who is Ivan Ilyin, and why is he important? Because of his malign influence on Vladimir Putin, and Russian politics, that’s why.

      Who is Ivan Ilyin?

      Vladimir Putin has been citing Ivan Ilyin to the Russian general assembly for years, and to this very day he is still citing Ivan Ilyin in his addresses to the general Assembly of the Russian Parliament.

      Putin has relied on Ilyin’s philosophy to explain why Russia had to (1) undermine the European Union and (2) invade Ukraine. When asked, Putin has cited Ivan Ilyin as his authority, many times.

      Since 2014, the Kremlin has been sending copies of Ivan Ilyin’s writings to regional governors as well as Russian civil servants.
      In 2015, an article in foreign affairs was referring to Ivan Ilyin as Putin’s Philosopher, while also describing him as a conspiracy theorist and a Russian Nationalist with a core of fascist leanings.

      A fascist political philosopher is a guiding light to Vladimir Putin. He is an inspiration for the Russian President.

      What does that say about Putin?

      Putin’s favorite philosopher.

      The life of Russian philosopher Ivan Ilyin and what his work reveals about the mindset of Vladimir Putin on his invasion of Ukraine

  6. If Putin attempts to use a tactical nuclear weapon at a target in Ukraine, it will backfire badly for him – with his domestic power structure, with his remaining allies, and with the US/NATO who will respond. Attempting to use a tactical nuclear weapon on a target in NATO will have even worse consequences, not least for for Putin.

    That said, when Russia is seriously losing its grip on Donbas or Crimea, Zelensky should start operating from an unknown and changing location, and the US should be now beefing up Ukr’s missile defense in Kyiv.

  7. From the beginning this was a win-win for Xi. If Putin captured Ukraine a vast source of food and minerals would fall into the Chinese sphere of influence. If Russia loses and it escalates into a European conflict that takes the whole continent down Xi wins also. What I can’t understand is how Putin does not see that Xi has a feeling of racial superiority that the Russians also have . Boundless friendship does not mean equality.
    What Putin failed to understand from his last meeting with Xi was not that of being thrown under the bus, but being allowed to drive all of Europe over a cliff.
    Even if Putin is a rational actor he has his country worked up to a form of insanity.
    Resentment is never reasonable.

  8. H-Man, cornored rats fight like, well, cornored rats. He is there and will rely upon his history with with cornored rats. He will rebuild during the winter (when nothing happens and it takes time to get 300,000 newbies to the front) and will coming roaring out of the lair in the spring.

  9. Two things about this article intrigued me. First, it is very clear to me that that market has not priced anything close to Russia using nuclear weapons to overtake Ukraine. Putin will use the referendum as an excuse to say it is protecting its territory. I looked back and saw the market went down almost nine percent on the first day of the Cuban missile crisis, so we could quickly head in that direction. If Europe is intelligent, they will let all the Russians in with one-way tickets. I don’t think Putin is crazy, but since he only surrounds himself with yes men, after a period, you become delusional, which is the state, I believe he is in right now. Second, I do think that Biden has made a miscalculation with the Ukraine issue. He stated in February that he did not want to start World War III. I believe we are already there. I am reminded of a quote from Churchill, “You were given the choice between war and dishonor. You chose dishonor, and you will have war.”

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