Russia fired Andrei Klepach for presenting a report that said the country could not win a prolonged war of attrition with Ukraine. Strong economies famously respond to economic analysis by eliminating the analyst. That's page one of every macroeconomics textbook.
Klepach worked as a top economist. His job was to look at numbers and say what the numbers mean. He looked at the numbers. He said what they mean. Russia said no thank you.
The official line is that Russia's economy is strong. The unofficial line is that anyone who says otherwise gets sh*tcanned immediately. These two positions are completely compatible if you've ever worked in corporate communications or suffered a traumatic brain injury.
Retail traders are currently Googling "how to invest in Russian optimism" and wondering if they can buy calls on denial. They cannot. But they will try anyway using a leveraged ETF they don't understand and a YouTube tutorial filmed by a guy in his parents' basement.
The report warned about a war of attrition. Wars of attrition are expensive. They require resources and time and the ability to pretend your top economist never existed. Russia has all three. The economy is strong. Just ask anyone who still has a job.
Klepach probably thought his analysis would be useful. He probably thought presenting data was part of his role. He was wrong on both counts. His role was to present data that confirms the predetermined conclusion. He failed. He's gone.
This is what peak economic confidence looks like. You hire experts. You ask for their expertise. They give it to you. You fire them. Then you tell everyone the economy is doing great. If that's not a bullish signal, I don't know what is.
Klepach's replacement will be much better at economics, specifically the part where you keep your f*cking mouth shut.
Photo by Marek Studzinski on Unsplash
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