The rumors of Vladimir Putin's, well, whatever—death, disease, deposing, or newborn baby—turned out to have been greatly exaggerated. The Russian leader was back on the public stage on Monday after a more than 10 day absence that had prompted one crazy theory after another about what was really going on.
Markets shrugged. The ruble was basically flat, and stocks sold off a little. You'd never know that people had speculated even harder-liners had overthrown Putin, or that now we know they didn't. And that doesn't make a lot of sense. If markets thought there was even a chance of an ultra-nationalist coup, then the ruble should have sold off at least a little on the risk of tougher sanctions. That didn't happen, though. Why?
Well, even in Russia, the simplest answer is probably the right one. "Inside information is so common in an opaque system," Paul McNamara, an Investor Director specializing in emerging markets at GAM, told me, "that the fact that the ruble didn't sell off more is good evidence that there wasn't a serious issue with Putin." Now the important thing to remember about Russia is that it is run of, by, and for the oligarchs. Anything that can make them money—especially news before it becomes news—will make them money. Indeed, that's what Cornell Ph.D. students Felipe Silva and Ekaterina Volkova found when they looked at Russia's stock market right before Putin annexed Crimea. Days before the invasion, insiders started selling stocks en masse in anticipation of the sanctions-to-come. And that's why, as McNamara explained, "if Putin had been removed in a soft coup, it seems likely that 'someone' would have known and tried to play the market." But there's no evidence of that.
Putin, in other words, probably just had the flu.
Still, it's more than a little strange. Opposition leader Boris Nemtsov's murder, on what everyone assumes was Putin's orders, seems to have set the Kremlin on edge. It was enough that when Putin went off the grid, his stooge-in-chief, Ramzan Kadyrov, said that he would remain loyal to Putin whether or not he was in power. Russia is still too much of an enigma wrapped in a mystery inside an enigma—even, it seems, for people in the inner circle—to have any degree of confidence about what it's going to do. The only thing that's easy to explain is its currency. "It's very hard to make the case," McNamara said, "that anything but oil really matters for the ruble." The two, as you can see below, have tracked each other almost one-for-one the past year.
When Putin sneezes, it turns out the ruble doesn't catch a cold. But if something ever happened to Putin, well, who knows. Even the people inside the Kremlin aren't good enough Kremlinologists to know that.