Russia’s Bear Case Scenario Political Bully Financial Cripple $RSX, $VIX, $VXX, $OIL, $GAZ, $SPX, $SPY, $DJX

Ukraine and Putin’s latest gambit take up too much ink in front page news. Russia which has been described as a gas station that thinks its a country by Senator McCain has changed bluster and basically has blinked.

Russia wanted Crimea as a physical possession and essentially annexed it by surprise. Imperialistic tendencies drove Russian behaviour. What they did not calculate is the massive flight of capital from Russia by Russian oligarchs.  Russia is doing poorly and the masses have been distracted. The elite know better and are voting with their pocket book.

Putin cannot control the flight of capital. Being a former KGB black ops guy he is used to massive government support and money is no object. Not sure that Putin has truly though through the ramifications of capital flight.

So now he increases the rhetoric about Ukraine’s gas bills and demands up to ten times what may be truly owed. Why? He sees massive Western funds being thrown at Ukraine and he wants most of it. An independent Ukraine on financial life support to the west paying protection money to Moscow will work just fine. Russian speaking interests be damned.

So he will use local dissidents who have been emotionally duped into wanting some kind of union or protection from Moscow as a leverage stick all the while demanding huge ransoms through gas pricing.

The sooner Ukraine and other European countries wean themselves off of Russian Oil and Gas the safer they will be militarily.

My advice frack away big time.

In the mean time if Putin had territorial ambitions he will shelve them in the interests of economic blackmail. BTW the occasional infrastructure problem deep inside Russia would be useful just to change their perspective and get Russians worried about internal security. If you could make Moscow’s lights go out for an hour or  two that would be great.

George Gutowski writes from a caveat emptor perspective.

President Obama Bear Case Scenario with Comrade Putin $BIK, $BKF, $EEB, $QQQ, $DJX, $SPX, $XLF, $SPY

President Obama is scrambling for options over Crimea. Some long-term cards look good. Stop importing energy from Russia. But Europe must do this. Basically Putin is a KGB bully who has never lost a fight in the school yard and therefore is prone to miscalculation.

The G8 meeting in Sochi is all but dead. Can you imagine the other G7 leaders showing up and saying what they are thinking. Putin doesn’t need that but would find it hard to walk out in his own country.

Europe will be at the forefront of effective trade sanctions against Russia. North America and other oil rich countries will need to increase production to compensate for Russian supply. I believe this will happen in a stealthy fashion and the Russians will one day wake up to pathetic export revenues.

The rest of the world will need to increase imports from Europe to compensate. So maybe the prize of a Benz or Beemer will come down some?

Obama’s short-term problem is getting respect from Putin. Probably through fear as Putin in a bully mentality only respects raw power. Obama needs to overcome the Edward Snowdon issue. Obama needs to overcome the Syria and Chemical weapons trump card that Putin played.

Obama needs a way to kick Putin in the balls so that he is gasping for air and no one dares come to his assistance.

That means financial consequences so that Russia cannot move money around on the world stage and further their agenda. Buckle up if Obama is going to redeem himself, and he has to, this will be a rumble to remember.

The Berlin Air Lift was successful.

George  Gutowski writes from a caveat emptor perspective.