General Winter has always been Russia’s Most Able Military Leader.

COP27 is about the politics of global energy – energy being the lifeblood of growth and prosperity. The Ukraine war’s outcome is also about energy: can Europe withstand Russia’s General Winter and coordinated assaults on its’ economy and political stability.

Blain’s Morning Porridge – Nov 8th: General Winter has always been Russia’s Most Able Military Leader.

“They are so many, and our country is so small, where will we find room to bury them all?” 

This morning: COP27 is about the politics of global energy – energy being the lifeblood of growth and prosperity. The Ukraine war’s outcome is also about energy: can Europe withstand Russia’s General Winter and coordinated assaults on its’ economy and political stability.

Who else did a double take when they realised how small Rishi Sunak is compared to globally acknowledged not-very tall French-person Emmanuel Macron. The French have a very distinguished history of small, very effective Presidents/Emperors, but I can’t think of a time ever when a Gaul has towered over a British Prime Minister before. Having never actually met Sunak, I am genuinely surprised at how small he is. No matter. My wife is vertically-challenged, but she’s as feisty and smart as they come. I am oft described as a Hobbit – short of hight, wide of girth, generally cheery with slightly hairy toes.  Rishi, bless him, is just too skinny and his suits are too tight for Hobbit attire. Doesn’t make him a bad person – that depends on how he plays his politics….


Ballsy move Prime Minister, putting together a Gas deal with the US to ensure UK energy security even while telling Global Leaders and Climate Activists at COP27 to “honour” promises to tackle climate change. (More about COP later this week…)

Sunak, and this will surprise readers, is right: the UK can’t move towards a more sustainable, carbon neutral, renewable-energy based economy without Gas as a transition fuel and energy security enabling the economy and investment to enable it. 40% of UK electricity is currently gas generated, and 85% of homes are gas centrally heated. The Torygraph says the US deal will be signed in the next few weeks.

Also in the news, is the UK’s Met Office predicting a warm, stormy and very damp winter – warning it might not get particularly cold, but flooding could be a crisis for the UK come February. Part of the problem is this summer’s drought has left the ground bone-dry, meaning water runs straight off, creating flash floods. This is the third year of a La Nina event, only the second time in 40 years, of cold Pacific water distorting the Jet Stream, potentially pushing every Atlantic low straight into Blighty!

The forecast says – normal winter in Dec/Jan with some cold snaps, very wet in Feb. The UK’s climate is changing: one of the Met Office boffins (you can’t really describe a weather scientist as anything else than a boffin), said “Winters are getting wetter, and within that the extremes are getting more extreme.”

Weather is real, and this winter’s temperatures should be among the first things Macro watchers look at this winter for clues on how the European economy and Trans-Atlantic politics are going to playout – not just in terms of reinforcing imminent recession in Europe, but also the long-term US-Europe relationship and the geopolitical outcomes from the current Ukraine war.

General Winter, and his able subordinates General Mud and General Frost, has long been Russia’s top commanders in the field. They tend to operate best in defence, but that’s all they have to do for the next 4 months…. Hold the line, and keep up the pressure on Europe.

The colder it gets, the greater the likelihood of energy outages across Europe and thus the greater the clamour for Russian energy and the more vocal calls for Ukraine to find a peaceful settlement with Russia will become.

Putin isn’t putting all his eggs in one basket; he has three other forces at play here aiming to destabilise and undermine the west.

Political Interference, including:

  • Putin’s-Chef, and Wagner Group boss, Yevgeny Prigozhin is boasting about his troll-farms “carefully, precisely, surgically” using far right platforms to attack Democratic candidates in the US midterms. Putin’s hope is electoral interference will lead to the gridlocked US congress blocking further US Aid to Ukraine.
  • Kompromat on Italian politicians and elsewhere, while playing the useful idiots on the left, to stage peace demonstrations to force Ukraine to reach an accommodation.
  • Ultimately Putin wins if NATO undoes itself from within, which looks entirely possible if Europe fractures via internal pressures, and/or a new US presidency turns isolationist and anti-Nato in 2025.


  • The Russian offensive against Ukraine’s energy and utilities infrastructure has little to do with breaking Ukraine’s will. It’s about ramping up the costs for the West of both defending Ukraine while also paying the ever increasing sums to repair infrastructure and keeping Ukraine function, at a time when each nation is facing rising budgetary, deficit funding and austerity spending.
  • The US has already indicated finance for Ukraine of over $20 bln for 2023. The EU is currently putting together a €18 bln financial aid package for Ukraine, including reconstruction. These costs are rising daily with each successive Russian strike. However, the EU money needs to be unanimous – and there splits about how much, and how the money should be provided. Hungary is trying to do a deal to unblock its EU recovery funds held back by rule-of-law failures.


  • It benefits Russia to keep oil prices volatile in OPEC+ by co-aligning its goals with the economic imperatives of the Oil-States to keep prices high. Expect more finagling in coming weeks.

What happens this winter will be critical for how Ukraine plays out. Russia may have been beaten on the field, but it certainly holds levers that could still unravel the united West, and if that happens – then Europe’s long-term energy insecurity will remain a massive disincentive as a destination for inwards investment.


Meanwhile, how bad with things get in the UK?

There is a terrifying article in the Journal of the Conservative Party this morning – Gold-Plated Pension Boom could “collapse the NHS”. THe article highlights the inconsistencies in the treatment of senior staff and consultants. Gosh, the NHS is broken.. Who knew? (US Readers – Sarcasm alert!)

What the article doesn’t expand to is how funding a 10% inflation linked increase in Government Final Salary pension funds basically means the rest of the UK – who have to survive on their self-funded pension pots – are funding the cushy retirements of civil servants, state services and former Prime Ministers on £115k for life. I remember writing an article years ago predicting that by 2031, 110% of UK taxes would be funding government pension obligations! Might have to bring that number forward…

Five Things to Remind You How Miserable it all is…

BBerg               Nagel Says ECB Must Continue Rate Hikes Even If It Hurts Growth

BusinessWeek   Xi’s New No2 Faces Challenge to Make China’s Economy Hum Again

FT                     Debt, Ukraine and Hunter Biden: Republicans prepare for House Majority

WSJ                  Softbank Billionaire Masayoshi Son to Drop Flamboyant Earnings Presentation

Thunderer        New Powers a threat for Financial Conduct Authority

Out of time, back to the day job, which today includes trying to understand about 10k pages of chemistry…

Bill Blain

Strategist – Shard Capital


  1. Bill,

    Apt quote from A Frozen Hell. It perfectly describes the situation in the EU, economically, politically and monetarily. Meanwhile in the US of A it will be a hot time at the polls today. Your fireworks were earlier this week and festive in nature. Ours will be today and tonight and will no doubt include exercising of our God given Second Amendment rights with an associated body count.

    Very true that the UK can’t move towards a more sustainable, carbon neutral, renewable-energy based economy without Gas as a transition fuel. Yet fracking is still banned in spite of huge shale gas reserves readily available. Kompromat on UK politicians and elsewhere, all playing the useful idiots to both Putin and Greta.

    • A Frozen Hell – excellent book on the Finish Soviet War of 1940. That’s where this morning’s quote is from..

      I am hearing today some concern from US fund managers about the destabilising effects of vote delays in the races are close – for instance Georgia, which will trigger further doubts. Its shaping up to be febrile..

      • Their concerns are well placed, many elections will be close, Georgia, Nevada, Pennsylvania, New Mexico and New York, to name a few.

        The rules for vote counting here are arcane holdovers from decades past. Whilst absentee/mail in votes arrive weeks before the actual election date, they remain uncounted until after the polls close. Then they are verified and manually tabulated. The process is fraught with delays and potential for errors and challenges. Due to the large number of mail in votes, It will be days before even the preliminary results are made available.

        Given the large number of candidates who have already said that they will not concede if they lose, it is likely that the election results will be unclear until after numerous recounts, litigation and of course our Constitutional right to display and discharge firearms.

        The broad market indices here are currently up nearly 2% on the day. Once the election results become muddled and Trump and Biden start making their typically idiotic comments the screens will turn red and all hell will break loose.

        I’ve been raising cash for the past week or so, the next week to ten days will a trader’s delight. Stay tuned…

  2. Putin’s going to get bumped off. Probably by some angry random (although under the pay of some shady figure) The Americans are loving the situation – complete win win. Bleed the Ruskies so they are incapable of launching any serious military operations for at least 15 years and therefore unable to aid China in any meaningful way. They want this war to continue for as long as possible, within reason.

  3. So it begins…

    “The Absentee Ballot situation in Detroit is REALLY BAD. People are showing up to Vote only to be told, “sorry, you have already voted,” Trump wrote on Truth social. “This is happening in large numbers, elsewhere as well. Protest, Protest, Protest!”

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