Here in the UK the Daily Mail is a somewhat right wing hysterical newspaper, but some of this is correct then Russia is in deep trouble:
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A good reason to make sure crazies don’t get their hands on the unthinkable.
The Captain
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Probably a better source than Daily Mail.
Yes, their economy is struggling. This is a few months old, but this guy does really good deep dives.
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No disrespect intended to the Kiel Institute but everyone seems to be missing the key issue, the Paradigm Shift that war is experiencing. Everyone is talking about the visible effects of the paradigm shift but not about the shift itself. Hundreds or thousands of pilots in safe places are flying cheap airplanes destroying expensive airplanes, a hapless navy, and expensive infrastructure. A country with no meaningful navy has destroyed Russia’s Black Sea navy. No war has been like this one ever before. And don’t forget, with home made weapons, Ukraine is no long shackled by Western squeamishness.
Slava Ukraine!
Heroyam slava!
“Slava Ukraini” (Glory to Ukraine) is a national salute that has become a globally recognized symbol of sovereignty and resistance. When spoken, the traditional and customary response is Heroiam slava! (Glory to the heroes!). You can learn more about its history and meaning through the Wikipedia Slava Ukraini Entry.
The Captain
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Sorry, maybe I’m just in a lighter mood today…
From the article:
‘F*** you! I’ll smash your face in!’ one of them can be heard shouting.
They speak English?!
Forbes has predicted that Putin now has only three years left before he is toppled, drawing the curtain on almost three decades of power.
I remember them saying he only had 2 years left 3 years ago… and only a year left before he died of cancer. Although now I guess, he’s closer
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Before we conclude that Russia is “falling apart” or “in meltdown,” let’s look at some Russian history.
Russia has a “culture of patience” (terpenie). They can absorb an incredible amount of suffering without rebelling. cf. “Peter the Great” and “The Gulag Archipelago,” both great reads.
Comparing Russia’s current conditions to key moments of historical distress reveals how the present crisis contrasts with past institutional failures.
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The Fuel Shortages vs. The Late Soviet Economic Collapse (Late 1980s – 1991). The current shortages are highly disruptive, but they have not triggered the universal scarcity of basic goods seen in 1991.
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Ukraine Battlefield Stalemate vs. The Russian Empire’s Collapse (1917). Unlike 1917, the Kremlin maintains rigid, vertical control over information, a vast internal security apparatus, and a heavily militarized police force to suppress anti-war dissent and prevent regional unrest from spiraling into an organized national uprising.
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Domestic Stability vs. The 1998 Ruble Crisis after the collapse of the USSR. Russia learned its lesson the hard way and now has massive currency reserves. Despite heavy Western sanctions, Russia’s central bank has aggressively managed the economy by shifting to a war footing, finding alternative trading partners (like China and India), and leveraging its massive financial reserves. Although a public poll showed Russians expressing high pessimism about long-term economic conditions, the currency has not suffered a 1998-style freefall, and the financial system has proved far more resilient than many Western analysts originally predicted.
A few brawls at gas stations don’t compare with the years-long unrest and political organization of the revolutionaries that overthrew Czarist Russia. Russians have always been able to absorb an incredible amount of suffering.
They aren’t starving. They aren’t being killed by the millions by ruthless invaders. They aren’t being enslaved by ruthless boyars or commissars and shipped by the millions to Siberian labor camps.
Have the Russians really become so soft that they will “melt down” even while the average Russian has central heating and enough to eat? In the Russian context, “melt down” means revolution and mass murder.
Russians are not Europeans. At least, they haven’t been for the past thousand years. Also read Peter Turchin’s book, “Secular Cycles.” According to Turchin, revolutions are started by “elite overproduction” —when there are too many educated or high-born aspirants fighting for a fixed number of lucrative positions, leading to intra-elite civil war. Many Russian elites emigrated when Russia first attacked Ukraine. They got out of the way - fast - when the threat of conscription raised its ugly head. The few who are left are under scrutiny by Russia’s security apparatus and can’t unite into an opposition. cf. Alexei Navalny, who really was an exceptional potential opposition leader until he was poisoned, imprisoned and ultimately murdered by Putin’s regime.
Russians can absorb an incredible amount of hardship without rebelling. Plus the modern Kremlin possesses digital surveillance, facial recognition, and anti-extremism laws that make the Tsarist Ochrana look amateurish. Russia is trading with India and China and managing its totalitarian control with modern tools.
This sensationalist journalism is not actionable for investors.
Wendy
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The only effective strategy for investors is Long-Term Buy & Hold, while minimizing the skim of fees, commissions, trading costs, and TAXES.
Business press and investment commentary spurring you to take one action or another, is for entertainment only, much like this forum.
intercst
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the wealth of brokers!
The Captain
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That’s true of almost any society. The US went through a decade of grinding unemployment, people living in tents in the public square, soup lines and kitchens in every city, and beggars riding the railroads and … nothing. In an earlier century we had a civil war which had been brewing for over a decade.
Heck, in 1766 people in this country tho9ught of themselves - proudly - as English. Then things changed, but it still took a decade to light the spark, and another eight years to consummate the blaze.
The French Revolution didn’t happen overnight, nor the one in Russia, nor any of them, really. The Dot-Com excess built up over years, as did the Housing Bust of 2008.
You never know when it’s going to happen, but you can be sure it’s going to happen - and with the market running this hot it’s a certainty.
You can get can get out of the way early, but you never know when the spark s going to catch fire. That’s the rub. I know some prudent people who are edging toward the exits, but keeping one foot in and one foot out. That’s “a little bit” prudent. Sort like being a little bit pregnant, I guess.
I had a friend who used to say “What if Microsoft misses a quarter?” During the dot on run up. Now it’s “What if Nvidia or one of those has a big miss?” Or worse, says “Nah, you know what, this isn’t going to be profitable for…ever.”
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The Big Mac has cast that aside.
Putin will have major problems. He is boxed in.
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The Russians take it to the next level. Terpenie is seen as sort of cultural virtue. As Wendy mentioned, terpenie was a theme of the “Gulag Archipelago” Also in “Day in the Life of Ivan Denisovich” where Ivan just sort of endures, which becomes an act of free will in a way. It is a metaphor for the whole country: things suck and you just deal with it.
Yes, BUT….. maybe that quite questionable virtue (YES, read those books!
), like many charming and/or alarming past USA traits, are now largely expired. The type of fatalistic doggedness exemplified by terpenie were/are typical of peasant/feudal life in poorer lands, but the Russia that matters nowadays (especially to Putin as exemplified by his policies designed to shelter inhabitants of Moscow/Petersburg from the nastier aspects of his policies) are no longer quasi-enslaved peasants experienced and resigned to harsh Winters and harsher feudal overlords.
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The depression, which the Soviet Union also experienced was nothing compared to the death and destruction that occurred in the Soviet Union due WW2. The citizens of Russia likely know of stories that have passed down from their family members that lived in that time.
The US civil War was awful too. But the current US population have no recollection of it. It happened too long ago. I know 2 of my ancestors died in the Civil War. meh. So what. I have no emotional connection to that US period of history. I do have some personal/emotional connection to WW2 because of the involvement of my father and uncles. And those fellas that experienced combat never said one word about combat. And the US a relatively easy time of it compared to the Soviet Union. And it is largely the Soviet Union endeavor on the Eastern Front that led to allied victory.
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Or maybe not. I’m in the middle of reading Secondhand Time, by Svetlana Alexievich. Published in 2013 (in Russian, I’m reading a 2016 English translation), it’s a collection of interviews of common folk over a couple of decades, woven into a narrative. The theme that shines through is one of resignation, pride in being able to endure repeated hardship, and quiet disgust at the political leadership, to the point of wishing for a return of Stalinism, because “things were better in the old days”. Yikes.
The economy has been so bad, for so long, and the political repression is so ingrained, that the common folk cannot conceive of how to live otherwise. It’s an enlightening book.
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The Russians did not volunteer. We saw the Russian young male flight at the beginning of this war. The best and the brightest exited.
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A lot of that going on.
Something that I had not thought about much is the population make up of Russia. It was bad before the Ukraine war and is about to get much worse. Large numbers of young Russians have fled the country and, sadly, many have been killed/injured in the war. In the 1970’s Emmanuel Todd predicted a problem in the old USSR. It must be far worse now:
And, IIRC, the population of the Ukraine was declining by about 1% a year before the war.
DB2
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Yep. Ukraine & Russia have similar demographic issues.
compare to USA
True, but even then there is a limit. The Russian Revolution did happen, after.years of oppressive rule and grinding wealth disparity between the peasants and Tsar. If that’s too old, we also remember the end of the Soviet Union caused in no small part by the frustration with the endless parade of inept leaders and bad economies, finally culminating in the appointment (election?) of Gorbachev. Even the Supreme Soviet understood that the bell had wrung and it was time for a change. In 1991 even Gorbachev agreed.
Things can go on in a bad way for a long time … until they can’t. I wonder if Russia is anywhere near that stage yet.
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