The Big Putin Short: Why this is the most underpriced short of the decade

Remember 2007? The US housing market was roaring. Everyone was buying. Analysts on CNBC kept saying "everything's under control." Meanwhile, Michael Burry sat in his office, sifting through hundreds of mortgage prospectuses, and saw one thing: beneath all that glitter lay a rotten core. He shorted the market when nobody believed it was possible. In 2008, he walked away with $750 million.

We're looking at a different asset now. Not mortgage bonds — but the principle is the same: the fundamentals are broken, and the market still hasn't woken up.

The asset is called "Putin".

Current price on Polymarket — his probability of exiting office by end of 2026 — is priced at ~10%. That's not an asset price. That's market blindness.

We are Big Putin Short. And we're going to explain why this is the most underpriced short of the decade.

Meat Grinder as Business Model

Any investor knows: if a company keeps dumping money into a losing project, that's not strategy. That's denial.

The Ukraine war is one man's personal "expensive hobby" — a man sitting in a bunker. Nobody else — not the business elite, not the military, not the people — is getting dividends from it. Only him. And he can't afford to end it, because then he'd have to explain why it happened.

Four years of results: By Dutch military intelligence estimates, Russia has lost over 500,000 killed and more than a million in total casualties — more than in any war since WWII. By Wall Street Journal data: 1.2 million total casualties, 325,000 dead. The estimates vary, but the consensus is clear: we're counting hundreds of thousands of lives. For what?

Putin declared the war's objectives as "demilitarization and denazification" of Ukraine. Here's what he actually got: NATO's border with Russia expanded by 1,340 kilometers — Finland joined the alliance in 2023, doubling the perimeter. Ukraine is armed with NATO equipment, supplied by NATO intelligence, fighting by NATO doctrine. "Denazification" was supposed to mean regime change in Kyiv — but Zelensky is still president. All Putin actually got was scorched earth and a front line that doesn't move.

Meat grinds against a wall of drones are not a strategy. They are a form of manpower disposal, where human life is burned like cheap fuel just to maintain the illusion of control.

Financial History for Textbooks (How Not To)

Let's talk numbers, because numbers don't lie.

Federal budget deficit in 2025 hit 2.6% of GDP — a pandemic-era high. The real consolidated deficit, including regions and extra-budgetary funds, is pushing 4% of GDP when they originally planned 0.5%. The 2026 deficit is budgeted at 3.8 trillion rubles, and that's the optimistic scenario. GDP grew 1% in 2025 versus 4.3% in 2024. The IMF forecasts the same 1% in 2026. The key interest rate has remained above 15% for more than two years — at that level, civilian investment simply dies. 66% of businesses have already cut capital expenditures. The liquid portion of the National Wealth Fund has been slashed in half since the war started — from ~8 trillion down to ~3.9 trillion rubles.

The state is desperately plugging holes: corporate tax up from 20% to 25% in 2025, VAT from 20% to 22% in 2026, and the threshold at which small businesses have to pay VAT — slashed from 60 million rubles annually to 10 million. Every coffee shop and beauty salon is now exposed.

In market language: margin call is happening. The state is squeezing cash out of its last reserves and out of ordinary citizens' pockets — not because there's a plan, but because there are no other options left. The only way to break the spiral is to end the war. But that's exactly what Putin can't afford to do.

Geopolitics: The List of Losses

Putin entered 2022 as a man reshaping the world order. By May 2026, he's a leader whose sphere of influence is shrinking in real time.

His ally Assad fled Syria in December 2024 and found refuge in Russia — Moscow lost its only Mediterranean naval base. Comrade Maduro was grabbed by American special ops. Khamenei was killed. Putin's EU lackey Orbán lost the elections in Hungary. Somehow Putin even managed to lose the support of his two closest partners, Armenia and Azerbaijan — enemies of each other — and now it's Trump sitting them down at the negotiating table.

Each of these men was a buffer, a source of resources, or political capital for Putin. Now they're gone. There are no more allies. Just North Korea, shipping shells in exchange for battlefield experience.

The Country Is Hemorrhaging People Faster Than It Prints Money

Since February 2022, between 650,000 and over a million people have left Russia — and most of them haven't come back. Among the emigrants: plenty of university-educated professionals, IT specialists, scientists, doctors, entrepreneurs.

On the front: manpower shortage. For the first time in the war, Russia is losing soldiers faster than it can recruit volunteers, according to Western military analysts in February 2026. In the economy: labor shortage. In medicine: doctor shortage. Demographics is the longest-lead indicator we have. And it says one thing: the asset is destroying itself from the inside.

Tuapse as the New Chernobyl

The Tuapse refinery — one of Russia's largest — was attacked four times in a single month. Black rain falling over the city. Oil in the Black Sea. Citizens panicking. Putin didn't show up to the disaster site. The state tried to cover up the scale of it. Just like they did with Chernobyl, which became the catalyst for the collapse of the USSR.

This is not coincidence or an isolated incident — this is a pattern. By October 2025, according to Russian energy market data, Ukrainian strikes had taken offline roughly 40% of Russia's refining capacity. Meanwhile, failures are multiplying across civilian infrastructure: bridges, pipelines, power grids — everything that was patched for 20 years instead of actually repaired is now coming apart on its own.

When the Elite Starts Eating Itself

This is where it gets genuinely interesting.

The wave of state expropriations has surged 4.5x year-over-year, surpassing 3.1 trillion rubles (over $40 billion). Among nationalized assets: Domenedovo Airport (roughly $5 billion), KDV Group ("Yashkino"/"Kirieshki," roughly $2.8 billion), Yuzhuralsovoto gold mining (roughly $2.4 billion), Metrovagonmash (roughly $1.6 billion).

In April 2026, a bill was introduced to the State Duma imposing a 10-year statute of limitations on privatization cases — with a carve-out for "anti-corruption" and "anti-extremism" cases. Translation: any asset belonging to any person can be seized at any moment. There are no permanent property rights. There's only temporary use at the sovereign's pleasure. Just in 2025–26, criminal cases have been opened against at least 99 regional deputies and high-ranking officials — about 14 new cases per month.

Here's the tell: former Transport Minister Roman Starovoit was found "shot dead" in his own car — shortly after his ouster, when a criminal case was already hanging over him. He was connected to the Rotenberg clan — and it made no difference. Call this the "Staroveyt Effect": even membership in the right clan guarantees nothing anymore.

The Russian Union of Industrialists and Entrepreneurs — the billionaire's club that always stayed silent — has started speaking out loud. RUIE warns of a wave of corporate defaults in H2 2026, notes that 72% of companies are seeing rising accounts receivable delinquency. This isn't just economic complaints. This is a public signal: the elite no longer trusts the system.

Eulogies from Inside

Igor Strelkov — one of the men who ignited the war in Donbas in 2014 — is in prison for criticizing Vladimir Putin. But he keeps writing letters predicting the regime's imminent collapse. Maxim Kalashnikov, a system nationalist and military analyst, writes that there's ongoing "squeezing out" of the central figure as someone who has exhausted his usefulness.

Ilya Remeslo — a pro-Kremlin loyalist who spent years collaborating with the Presidential Administration and helped put away Alexei Navalny — is now openly challenging Vladimir Putin. In modern Russia, this would normally be unthinkable. The fact that he remains free suggests one thing: he likely has strong protection from factions already positioning themselves for a potential transition of power.

The King Is Afraid of His Own Cooks

A European intelligence report obtained by CNN paints a picture of extraordinary paranoia inside the Kremlin.

Putin's cooks, bodyguards, and personal photographers have been banned from using public transport. All visitors now undergo double screening. Phones with internet access are prohibited in his presence. Putin has stopped visiting his own residences — in the Moscow region and at Valdai. Live appearances have been quietly replaced by pre-recorded footage.

After the killing of General Sarvarov in December 2025, Defense Minister Gerasimov and FSB Director Bortnikov openly clashed at a meeting with Putin present. Security protocols were immediately extended to ten additional senior commanders.

The most telling line from the intelligence report: former Defense Minister Shoigu is now formally associated with "the risk of a coup" — and still retains "significant influence within the military high command."

The Math of Liquidation: Why 2026

Three vectors converge at a single point.

First: the economy. Budget deficits, inflation, an expected wave of corporate defaults in H2 — this is consensus among analysts from SIPRI to OSW. When businesses start defaulting and purchasing power of wages collapses, the social contract frays.

Second: State Duma elections in September 2026. The ruling party, United Russia, is already at historic lows in trust. Blocks on mobile internet, YouTube slowdowns, pressure on Telegram, crackdowns on VPN services — all of this has triggered an unprecedented wave of public rage by Putin-era standards. Even pro-government polling centers are registering collapsing confidence in authorities and in Putin specifically. For a system used to manufacturing electoral results, this will be a stress test comparable to the 2011 elections, which sparked the largest protests in modern Russian history.

Third: elite fatigue. When even the Rotenberg clan can't protect its own, when regime insiders publicly challenge the president, when RUIE speaks up — the rules of the game cease to exist. And when rules disappear, every player has personal incentive to exit first. It's the classic hot potato game. And the hot potato is Putin.

Early 2026: WSJ ran a piece saying this could be Putin's worst year — the war is grinding down the Kremlin's elite, and they're starting to calculate exit strategies. Smart money in Moscow is reading that. And taking notes.

Don't Just Watch

As of May 2026, the market prices Putin's exit by year-end at ~10%.

You just read thousands of words of data saying the real probability is orders of magnitude higher.

That's called a mispriced asset. Or, if we're being honest: the most obvious short of a decade.