Wednesday, December 17, 2014

WORLD_ Beware: Putin, the wounded animal

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Beware: Putin, the wounded animal

CNBC 
By Jake Novak | CNBC –
Wed, Dec 17, 2014 4:27 AM AEDT

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Alexei Nikolskyi | RIA Novosti | Kremlin | Reuters

Vladimir Putin is not a good man and not a good leader.

There, I said it ... and the U.S. government basically began saying that eight months ago, when it joined with other Western nations in imposing a series of economic sanctions on Putin's Russia.

The sanctions hurt Russia a bit, but now oil's freefall is causing the ruble to crash and slamming that nation with a guaranteed recession or even depression.

Read More The collapse of Russia in 3 charts


This would be something worthy of extreme vigilance for the U.S. government and investors alike even if Russia were a true democracy governed by at least semi-responsible leaders.

But it's worse. Much worse.

Vladimir Putin has always been a lot more like a petty Latin American dictator than a statesman. Think about it: He made his bones in the secret police, consolidated his power with a ring of super wealthy backers, and he claps political opponents in jail at a moment's notice.

Read More Retail platform FXCM halts ruble trade

In short, Putin is like a Augusto Pinochet or a Juan Perón ... but with much more steely resolve, a massive military, and nuclear bombs.

But even with Putin's extremely visible and frightening track record before us, it's clear the Obama administration and even the investment community is still not prepared for the extent of the damage the Russian leader can unleash on his own people, on his neighbors, and on the U.S. financial markets.

There is nothing more dangerous than a wounded animal. Vladimir Putin is wounded - and he's not known for holding back.

His entire adventure in Ukraine this year is example of just how destructive and unpredictable Putin can be, and that all happened when oil was still trading at $100 a barrel.

Read More Russia says it will react if US imposes new sanctions

So what could he do now?

For all we know, Putin has already done a lot of the following things, but here's just a partial list:

1. Launch another attack on Ukraine or another neighboring nation

2. Cut off energy supplies to the rest of Europe

3. Launch an all-out cyber war on Western and U.S. companies and government agencies

4. Nationalize foreign-owned or -controlled businesses inside Russia

The question is: do the White House and NATO realize the situation? Does Wall Street?

Despite some political bluster from President Obama after the hostilities began in last spring, I still think we're dealing with an administration that thinks that light sanctions and negotiations will be enough to keep things from getting out of hand. Remember, this is still the president who told Putin's top lieutenant back in early 2012 that he'd have "more flexibility" to deal with Russia "after my re-election." He's also still the president who mocked Mitt Romney during the election for saying Russia was a serious foreign-policy threat. And while John Kerry is now at the helm, this is still the same State Department that thought then-Secretary of State Hillary Clinton pressing a make believe "reset button" was a good - and appropriate - response to a tyrant like Putin.

The Obama team's lack of vigilance has almost been matched by Wall Street's. Most of the discussions about Russia's ability to drag our markets down centered around the Ukraine crisis earlier this year, with little talk about the overall stability of the nation and Kremlin itself. Only people like Hermitage Capital CEO Bill Browder took the appropriate tone when he started sounding the alarm bells in 2006 about Putin's corrupt government and accomplices in the domestic Russian business world.

I'm still not sure that enough people in Washington and on Wall Street have yet grasped this reality: Romney was right. Browder was right. There is almost nothing Putin hasn't already done to stay in power already.

Just imagine what he'll do now that he's been poked with a very sharp stick.

Commentary by Jake Novak, supervising producer of " Street Signs ." Follow him on Twitter @jakejakeny.


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What do YOU think?


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Nguyễn Hoài Trang
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