We suspect there is a misunderstanding of the goal of the sanctions and how they work. There is really little chance that these sanctions and threats of more will change Putin's course very much.
A regional power Russia may be, but it has nuclear weapons, a strong military and a profound sense of embarrassment and loss of pride in the post-Cold War era.
The sanctions are meant to express strong displeasure and incentive for Russia to adhere to the general rules of the international community. The rules are flexible enough for some exceptions, like Kosovo when a people were being massacred.
It is unreasonable to expect the impact of the sanctions to be immediate, but over time, the financial isolation will take a toll. And there is a larger cooling off effect as businesses and banks want to stay clear of additional sanctions as the penalties can be severe.
This Great Graphic, created on Bloomberg, shows the performance of the Ukrainian (yellow line) and Russian stock market (white line) as of the end of last year. The outperformance of the former is clear. The equity market, of course, is not the last word, but it is suggestive of a different assessment than the hand wringing would suggest.
