Whatever Putin thinks he may have gained with this "show of force" and mafia "protection racket" (and geographically, it ain't much), he lost far more in potential goodwill as a reliable stable business partner, and with prices of commodities down, so may be the dreams of becoming economic power player on the world's stage - something he wants to achieve with military power, but which ironically was simply offered to him by Bush several years ago.
Of course, AP has a more positive spin: Conflict is unlikely to deter Russia investors but there is the rub:
"As a precedent, during the year after Prime Minister Vladimir Putin oversaw an invasion of Chechnya in 1999, the RTS index rose by a whopping 141 percent."
Putin just may be confusing an independent Republic of Georgia with Russian territory of Chechnya and Islamic terrorists.
As Ian Hague, a NY-based fund manager said coming back from Tbilisi: "Russia will be a pariah. It is a pariah. It's difficult to do anything other than reduce your exposure"
Also, how did Western Europe survive before Russia so benevolently agreed to supply them with all that oil and gas?
Good work. I started looking into some of these same sources.
I think you’re correct that Putin probably is probably very disappointed. A spike in oil prices that would pay for his invasion didn’t happen.
Russia: BTC Pipeline is ‘Dead’
http://www.freerepublic.com/focus/f-news/2063102/posts
and this:
Georgian rail bridge blast hits Azeri oil exports
http://uk.reuters.com/article/oilRpt/idUKLG43375520080816
How much would it hurt Russia if we banned them from US financial markets? Maybe talking about that possibility publicly would help drive down their market and give the US some leverage over the situation in Georgia.
I know other non-military cards they have been talking about is turning the G8 back into the G7 and ending the NATO-Russian partnership.
What other non-military options does the US have?
Asia Times Online, HK: Georgia invasion worsens Russian downturn
Moscow's equity markets, whose benchmark measure has declined with increasing rapidity since the start of the year, have turned worse with Russia's invasion of Georgia.
To be sure, the conflict in the Caucasus has hurt. On the Friday of the Russian assault on Tskhinvali in the Georgian breakaway region of South Ossetia, the RTS index was down 5.9% on the day (August 8) to close at 1,723.
British academic Martin McCauley suggests that the definitive provocation for the outbreak of hostilities on Georgian territory could likely have come from the circles around South Ossetian secessionist leader Eduard Kokoity attempting to incite a Georgian attack so as to draw Russian forces into the battle. ...
Forbes.com: Investors Turn On Russia
But even though the fight for the Georgian breakaway republic of South Ossetia was over in a matter of days, it has had a long tail. Russia's leading stocks have failed to return to pre-conflict levels, and on Friday the benchmark RTS index fell 1.2% at the end of trading, to 1,701.61 points. On Thursday, the Russian central bank revealed it had lost $16.4 billion in foreign reserves last week, with the total falling to $581.1 billion.
Russia has tried to present itself as a more business-friendly prospect this year, particularly with the arrival of Medvedev in the Kremlin; his reported declarations have included fretting over relations with the European Union as a trading partner in the wake of the Georgian conflict, as well as asking Russian authorities to "stop causing nightmares" for businesses.
TIME magazine: Risky Business in Russia
The big question now is whether this international love affair with Russia as a place to do business can continue. The shooting war in Georgia this month sent investors in Russian stocks rushing for the exit: the RTS stock index has sunk to its lowest level since November 2006 and is down 32% in the last three months. The fighting was the most deadly sign that Russia is not a predictable or stable investment environment, but it was by no means the only one. Along with the new geopolitical uncertainties, foreign businesses and investors are also grappling with signs of economic vulnerability such as rising inflation and slowing oil production, as well as heavy-handed corporate meddling by the government — not least in a high-profile joint venture involving British oil giant BP.
But heightened political tensions between Russia and the West are sure to prompt potential investors to take an even longer, closer look before plunging into the Russian market. There has been talk in Washington and elsewhere of kicking Russia out of the G-8 group of nations, and some analysts believe the Kremlin's actions will ultimately prove counterproductive for the economy. In a note to clients, Commerzbank analyst Michael Ganske wrote: "The strong macroeconomic story of the country is increasingly obscured by homemade negative headlines and developments that clearly worsen the economic outlook for Russia." Ganske went so far as to call the Georgia war "a bloody next act in a screenplay that could be named 'how to destroy the investment story of one of the strongest credits in the emerging-markets universe.' "