They warned us, and we didn’t listen.

We can't believe it, but its happened. Stop. Look. Listen.

Blain’s Morning Porridge, 24 Feb 2022 – 

“The Russian soul is a dark place..”

This is deliberately a very short Morning Porridge.

This morning’s invasion of Ukraine will be a massive market mover. Rather than jumping to any conclusions or making predictions – it’s probably best to watch and listen to what’s happening in Ukraine, and take time to figure it out. Consider the implications, consequences, and to strip out high emotions. Markets were already fraxious – but the price spikes were seeing across oil and gold sum up the reaction to the Russian Invasion – complete surprise despite all the warnings.

Like so many other market participants I did not believe it would happen. I am shocked, revolted and horrified. It just does not feel real, but for Ukraine it is. I did not believe the intelligence Western Governments were pushing at us – but Biden was right and telling the truth. We did not listen.

Russia’s actions this morning mean The West must respond, marshalling the full Arsenal of Democracy at its disposal to hit Russia hard, combining the might of Nato, Decency, Law and Order to clobber Putin with the ultimate weapon….

Which sadly is… based on our current military capability…

Today, the best we can do is send a Very Angry Letter, telling Putin just how angry we are…

And that’s going to be a great comfort to Ukraine…?

The West has miscalculated massively.

Yesterday I received an email from a Russian:

“Are you sure that Germans, Italians and the French are still closer to Brits and Americans than they are to Russians? Back in the Cold War there was an impenetrable ideological East-West divide. Now there is none. The world is realigning according to the interest of the actors rather than ideological shadows from the past.”

I responded:

Are you serious? The fundamental differences between Russia and Europe are more real than ever. Europe got rid of Kleptocratic Absolute Dictators 77 years ago and embraced democracy, law and order and decency. Russia had the opportunity – but let it be stolen from the people by the oligarchs and other criminals. Democratic Europeans have nothing to gain from dishonest absolutism. The health, wealth, freedom and happiness of the West is far ahead of Russia.

European and US democracy may be imperfect and fragile, but it’s a damn sight better than what Putin has become – a Fascist, a Nazi willing to put his own into the meatgrinder in pursuit of his personal ends.  

I suspect the way I feel is the same as my Grandfather must have felt on September 1st 1939 when the Nazi’s rolled into Poland. Remember, the Russians swiftly followed them. Europe was plunged into 6 years of hell.

My Grandfather taught me all about appeasement and political failure. And he gave me a love of history – and an understanding of how even after such terrible mistakes, democracy eventually triumphed.

History repeats. Let’s hope not so bloodily. Democracy works. Kleptocracies don’t.

Let’s watch and listen… and pray.

Bill Blain

Shard Capital


  1. The Kaiser announced he was going to launch a war to anyone who would listen. World War I followed.

    Hitler wrote a book, Mein Kampf, which openly announced the future German expansion in the East and discussed the “Jewish Peril”. World War II followed.

    Putin gave speeches and interviews (dating back to 2007) in which he gave his version of history (i.e. Ukraine is a part of Russia) and the invasion of Ukraine followed.

    Maybe, if an authoritarian leader announces plans to invade/conquer – we should listen. And plan accordingly.

    • And these days the same thing happens in new Iranian nuclear deal negotiations. And again, the West tries the appeasement approach. Contrary to Russia which is a nuclear superpower (even though the bombs and missiles are the only superpower attribute they have), Iran is just a failed, extremist cleric state ruled by the bunch of shia islamic fanatics but the West prefers appeasement again.

  2. Bill – ‘Fraid you did miscalculate this throughout. Putin’s origins, training and brutal revanchist actions throughout his rule with his idealogy captured in his own essay. The exact timing of this phase driven by a combo of long term military build up, fostering Western dependancy & dissent, seasonal advantage plays and plain event driven opportunism. Even the skeptics at the time now can see the first spear-shaking exercises built up the infrastructure (in clement weather) for swift redeployment when a gas-starved Europe (& Nato) would vacillate. Deployment of AS400 batteries along SW of Belarus denies any chance of Western assistance & air-cover. The troop carriers purpose in the Black Sea – Doh! Even forgetting former glory, the thing Putin could not tolerate was a functioning democracy next to mother Russia; the real threat was always internal not an external (Nato) one. In an autocracy, how many votes count? So, its what’s in that mind.. There is no practical downside now of not rolling right across Ukraine, destroying it’s military & democratic base, electing a puppet (and even leaving a buffer row of ‘sovereign’/client province/states between Russia & the rump of Ukraine (other solutions are available). Ironic that the Security conference was in Munich (argh Sudetenland..)

  3. The continued talk from the EU and others about possible EU or NATO membership is what created this, not the Russians alone. Does nobody remember the cuban missile crisis? this is the same thing. How would UK and France have reacted in the 80s if Wales and Belgium as neighbours joined Warsaw pakt? There were diplomatic solutions but putting even the idea of a NATO base in Ukraine means no talks are possible. I blame the legacy of Merkel’s EU (also to blame for the atrocities in Yugoslavia as was). Russia is a klepto state, but then the Netherlands drug economy is as big as it’s real one, so difficult to preach.

    • It will come as a surprise to Merkel (a) that it was her EU, and (b) that she can be blamed for the actions of Serbs in the early 90s.
      Drawing a comparison between state-sanctioned rent seeking in Putin’s Russia and the inflow of drugs via Europe’s largest port suggests your analysis is as wayward as your grasp of history.
      I would be more polite but Putin and his ilk exploit this ludicrous whataboutery by Western apologists; the invasion of Ukraine has nothing to do with NATO or the EU – he knows full well that Ukraine won’t join NATO. He’s doing it because (i) he believes erroneously that it’s Russian territory, (ii) he wants a buffer that happens also to be rich in agricultural and commodity terms, (iii) he can, and (iv) his kleptocratic regime cannot tolerate the existence of a much more successful, democratic nation next door to his failing state.

  4. Fantastic read this morning Bill. It’s a sad state of affairs.
    Poland, Ukraine and UK have deep historical ties, built on shared commitment to peace and security and stand together against aggressors. Interesting to see how the rest of Europe reacts.

    • Why the rest of Europe? This suggests that you consider the UK’s response adequate.
      London has been the laundromat of Russian money for decades; squeeze the oligarchs, you squeeze Putin.
      Russia is entirely dependant on hydrocarbon revenues; the Russian state hydrocarbon entities have dual listings in the City and BP and Shell have interests there..
      It all comes back to money and the UK has shirked its responsibilities for years. If we wanted to, we could seriously harm Russia, but that might harm our interests.
      The reluctance of Germany, Italy and Hungary to cut off gas supplies would be more understandable to UK audiences if we did not have our own well-developed oil and gas industry. In that context, the German decision to halt the approval of Nordstream 2 is worthy of recognition.

  5. This is going to hurt – a lot, and how it eventually turns out will, in the long run, be determined largely on the resolve of the new German coalition.

    It was the “blessed” Angela who contrived to make Germany totally dependent on Russian energy supplies and were she still in charge I could well see her over diplomatic approach bringing about a reconciliation with them.

    No doubt the Ukrainians will be grateful for the 5000 helmets that the Germans promised to send. I hope so, because that might well be all the help they can expect from that quarter.

  6. Azov (with US arms and training) have been shelling civilians in Donbas for 8 years now.
    That our newspapers refuse to print this does not mean that Ukrainians, Russians Indians, Chinese and western decision makers do not understand it well.

    This is an attempt to defang the murders. I applaud it. We should all applaud it. The sponsors of the Minsk agreements (France and Germany) must feel very ashamed that the separatists have been forced to do this.

  7. We hear very little about China as it relates to Russia and Ukraine. Would this military action take place if China also threatened sanctions and other punitive measures?

    • China declined to criticise Russia last night in the UN.
      THey expect Russian Energy and for Russia to absorb the West’s attention while they continue with their own agenda. Russia now sees Asia and China as its market. China is discounting US and West from its world view, and will seek to exclude us from theirs..

  8. Here is a scenario out of left field; Russia has pulled around 70% of their troops on the Chinese border to invade the Ukraine, it would be a perfect time for the Chinese to take over Siberia, as there are more Chinese ethnics in this area than Russian, combined with all of it’s wealth in natural resources that they need; probably easier than Taiwan and so much more beneficial. No one would come to Russia’s aid, China would then have the resources from this land grab to at a later date prosecute a successful war against Taiwan, Japan and the US, by dominating and supplying Asia with the resources that Europe currently receives from Russia.
    China would then also have a presence just across the Bering Strait from Alaska… this would certainly be a game changer for the geopolitics and the Ukraine a sucker punch for Putin.

  9. Do the West accept any responsibility for this problem? Annoying Russia seemed to have become a sport in the west over the last 10+ years. The Minsk Agreement was never implemented for the last 8 years. Ukraine made it just Ukrainian speaking and not Ukrainian and Russian speaking. If we are democratic in the west then why did we not allow the people in eastern Ukraine to vote to decide whether they stay Ukrainian or be independent. Rather like Catalan Independence except Ukraine was fighting the eastern cities. Putin kept stating that he didn`t want NATO/EU expansion/weapons on his border. I am not saying therefore we should oblige but we really shouldn`t be surprised by a reaction. Cause and effect appears to not apply anymore in a lot of people`s minds. It seems there are people who still think it does…

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