Russia: Coup, Mutiny or Conspiracy?
A Sober Look On Wagner's Latest Opera(tion)
So This Happened…
I am sure a lot of my readers will have followed over the weekend the rather confusing series of events unfolding Saturday, starting off with a supposed “coup” happening in Russia, only to be “resolved” in less than 24h.
Let’s rewind a little.
The Wagner Group is a “mercenary” group in the service of Russia. I put it in quotation marks because it is more akin to the French Foreign Legion than a real mercenary group in the historical sense.
It is made of Russian or Russia-friendly people, led by former Russian intelligence and military officers, and fighting for Russian interests. While being supplied and supported by the Russian Army logistics and defense budgets.
So this should already put to rest the poorly understood quote of Machiavelli about the danger of using mercenary forces. A true independent condottiere armed group, Wagner is not. (more on how Machevielli is anyway wrong in this excellent Twitter thread for those interested)
The second important context is to discuss the real “ownership” of the group. On paper, the very loud and bombastic Jevgeni Prigožin. He is officially a former businessman in catering, but also a war movie maker, and more likely a St. Peterburg mafia boss with close ties to Vladimir Putin.
The third element is taking at face value Prigožin's declaration is utterly stupid. The man is a walking disinformation machine, saying everything and doing its opposite on the same day.
Including infamous declarations that he was running out of ammo (while bombing more than ever) or suffering huge losses (while pushing and causing way more casualties) or leaving Bakhmut (while finishing the conquest of the city).
Overall, the goal has been consistent: to incite the Ukrainian forces to make stupid tactical moves, and bring reinforcements into an unfavorable spot, where they would be slaughtered by artillery and air strikes.
Midsummer 2023
On Saturday, the Wagner forces (or as it turned out, at best 20% of it) started a “coup” against the Russian top general, while still, in theory, supporting Vladimir Putin as a president.
Then came a series of confusing news, from the seizing of logistically important, but politically irrelevant, Rostov-On-Don, and a “march” on Moscow (you will notice, I will rely a lot on quotation marks and explain why the terminology matters).
All of this to be suddenly canceled, a deal apparently brokered by the Belarusian President, Prigožin being “exiled” to Belarus, and all mutinous soldiers pardoned. All Wagner troops not directly involved will be offered a direct contract to be integrated into the Russian Armed Forces.
So what was this all about?
There are essentially 3 categories of interpretation. I will give them a likelihood percentage, and discuss what I believe is the most likely now that the dust has started to settle.
What Was That ?!
Option 1: An Actual Coup
Probability: 10%.
The idea that this was a real coup was pushed from the very beginning of Saturday’s events.
Whether it was an internal power struggle or something organized from the outside by the CIA/MI6.
It is impossible to fully dismiss it, but that is unlikely for a variety of reasons:
I have never heard of a coup being announced in advance, instead of a surprise attack/assassination/insurrection.
A coup targeting a regional administrative center instead of the capital is more than a little stupid.
If the plan was to “march” on Moscow, this was a bold one, considering the risk of air/missile strikes.
It clearly wasn’t supported by other armed forces, generals, politicians, oligarchs, or anybody, really.
It never challenged Vladimir Putin’s right to rule, just the authority of top Russian generals and the defense minister to rule over Wagner.
Even most Wagner soldiers seem to not be aware they were doing a coup and instead had just been told they were redeployed to guard the border area.
So if this was a coup, it was one of the stupidest in history. Again, possible, people have been stupid in history for sure.
But that’s quite a lazy take.
The fact that anybody considers it seriously and with certainty is more a reflection of wishful thinking.
Within the Western elite, many have been waiting for a coup against Putin for 20 years now.
“Any time now…” is the forever motto of the forever wrong and forever well paid by the US think tanks’ Russia “analysts”.
This weekend proved a good litmus test. Anybody going instantly on “Putin is doomed” needs to be blocked from being trusted ever again.
Option 2: A mutiny
Probability: 50%.
The fact that few considered using the right wording is maybe a testimony to our increasingly impoverishing language.
A coup targets the head of the state in order to replace him.
A mutiny is a “concerted revolt (as of a naval crew) against discipline or a superior officer“.
So … like Wagner refusing to see its soldiers forced to sign contracts with the Russian Army? And Prigožin openly defying Shoigu and the army leadership? And sizing a military command center not far from the frontlines?
Mutiny tends to follow a pattern:
A specific group of soldiers, from a ship crew to entire armies get really angry at their commanding officer for some reason. Often a valid reason.
They refuse orders, try to arrest or even kill the offending officers, refuse to go back to base, or leave it, etc…
Usually, after a successful mutiny, comes the “now what?“ moment. The soldiers sober up and realize they are now defying the entire army of their country. And their president/king/dictator. And that supplies are likely getting low. And that the population rarely supports them.
From there, depending on the level of stupidity of all parties involved (as this is invariably a situation that could and should have been avoided), the mutinous soldiers can be killed, arrested, demoted, pardoned, or vindicated (their grudge & revolt is acknowledged as valid).
The outcome often depends on how many people got killed in the mutiny. On this one, it seems the death toll is anywhere between 0 and 20-30, so low enough for de-escalation.
Most of cases, mutinous soldiers have no political goal and are very patriotic. They stage their protest about themselves and specific military issues.
Saturday fits the pattern so well that it makes it a likely scenario.
And a military force made out of likely not-so-smart convicts and adventure seekers is a good candidate for performing a not-so-smart mutiny.
If it had happened with any other force than one led by Prigožin, I would have given it a 70-80% probability.
Option 3: A False Flag
Probability 35%.
Could the entire thing have been pure theater?
Maybe.
Here are a few things that make me consider it.
1/ Prigožin has been clearly assigned the role of liar-in-chief, telling the West and Ukrainians what they want to hear. Running out of ammo, running out of men, etc… And they fall for it. Every. Single. Time.
2/ The timing is incredibly suspicious. Just when Ukraine was realizing its offensive was pointless and pausing it. And just like clockwork, the Saturday drama led to renewed offensives with no more results than the previous ones.
3/ Persistent rumors seem to point out that defense minister Shoigu and other generals are getting sidelined for having let the hostility between the army and Wagner degenerate this far. This might have been the whole point of this little 24h drama.
4/ Wagner soldiers are all pardoned and will all be integrated into the army. This is rather uncommon after a mutiny.
5/ Even Prigožin himself is pardoned and given some nebulous role in Belarus. Except if he “falls down the stairs” soon, this might indicate he was on it since the beginning.
6/ Prigožin is close to Putin and really holds any power ONLY thanks to him. He is not popular among the soldiers, and maybe not really even among Wagner soldiers. He is also not a real oligarch with billions of dollars on his hands. So really, what support network could he imagine having, either in a mutiny or even worse, in a coup?
7/ The Kremlin overreacted very publicly and called it a coup. And then did absolutely nothing to stop it. Are we really going to believe the ex-KGB Putin would just do nothing if actually threatened? And why would they ever want to look weak or unstable internationally?
My automatic assumption with Prigožin is that anything he does or says is misdirection. He still hasn’t given me any reason to think differently.
My Personal Guess
Frankly, despite giving a lower probability, I am tempted to believe in the false flag version. Just too many things do not add up.
I am giving a low probability because I could be wrong, and I really cannot prove it. Just call it a gut feeling.
The big give away in my opinion the reaction from the Kremlin. From bringing publicly the specter of the 1917 coup and subsequent devastating civil war to pardoning everybody in a few hours. The lack of coherence is striking.
I believe the real targets were both:
Removing Shoigu, which actually could have maybe done a coup. Hence reinforcing Putin's grip on power, and also replacing a defense minister whose track record is not really stellar in the preparation of the Russian defense industry.
Trying for Ukraine to renew its attacks, and believe internal turmoil is their chance. This could deplete reserves enough that an offensive with a newly formed and trained army could open a new front and collapse the Ukrainian defenses in the South.
Extra bonus point could be rooting out traitors who try to support Prigožin and expose themselves. Whoever did not vocally support Putin has been duly noticed as well.
Or moving troops around the Ukrainian border while pretending to do something else. Not central to the plot, but welcome if it works.
Lie and faking weakness to tease your enemy into attacking and exposing himself is a long and tried strategy known since at least Antiquity.
So this idea has a lot of appeal to me, especially with a lot of little things that “feel off”.
A simple mutiny is likely as well, even if less interesting.
Takeaways
No matter the veracity or importance of it, I expect Ukraine and its Western backers to be re-invigorated by these events.
They have been dreaming of the collapse of Russia and the possibility to dismantle it into a dozen of statelets for eons. And by now, I firmly believe we in the West are taking decisions based solely on wishful thinking.
This might at the margin weaken Russia's international standing, as no one will be 100% sure it wasn’t a failed coup. This is nevertheless likely to be forgotten quickly. Like everyone already forgot the 2016 coup in Turkey, despite lot more spectacular fireworks. Direct visits of high-level officials straight to China and Iran to explain behind closed doors were almost immediate for that reason.
So overall bullish on defense stocks, as we are now going to be told that with just a little more pressure, a few more weapon deliveries, and the hated-Putin regime will collapse on itself.
Equally bullish on inflation and bearish on Europe.
Especially Eastern Europe.
At this point, I prefer by far political dysfunction in Columbia or Brazil over a political focus on directly intervening in Ukraine in Poland and Romania.
Yes, Polish stocks are cheap. For a good reason in my opinion.
If it turns out Russia is getting more unstable than I think, this is highly bullish on oil. In the 1990s, production collapsed by at least 5 million barrels per day. This would create a massive oil shock. So I will be on the lookout for a sign of it, but will not hold my breath either.
Maybe the most important lesson is to get out of the social media distortion bubble.
I suspect no one will remember or mention this episode in 1-2 years. And most “hot takes” are garbage.
This is a good occasion to unfollow a lot of Twitter accounts that prove themselves less than serious.
Good analysis and good investing are best done calmly. And based on fact.
An anathema to the 24/7 news cycle.
So keep calm and carry on.