Blain’s Morning Porridge 16^th March 2026 – Market Sentiment will Tumble on Unwinnable Wars

“This is not Franklin Delano Roosevelt we’re dealing with here”

Suddenly global markets are reeling – waking up to the reality of the unwinnable Iran War. What will a dramatic shift in sentiment mean for stocks, bonds and commodities as stagflation beckons, and Trump finds himself isolated? There is a growing risk of a liquidity shock to global markets.

Link to Podcast

Did you feel the moment the wind changed over the weekend? The strum et drang of markets are now being driven by fears of what increasingly looks an unwinnable war in Iran. The big issues are sentiment and consequences. Markets had generally been positive, constructive and bought into expectations of US growth, earnings and the AI boost. Now they fear stagflation, rising rates, slowing demand, supply chain shocks – and a rising concern on just how much the US mid-term elections may destabilise markets further, especially if Trump is hammered in the polls!

The consequences of Trump’s attack on Iran on stocks, bonds and the global economy look bleak – and the risk is a crisis triggered by liquidity flight!  Personally – I’m back to all-in on Gold.

Stop for a moment….

I love writing about markets – they are genuinely interesting and stimulate what passes for my mind. But rather than try explaining rising instability and risks, can’t I have occasional days off to talk to talk about how fantastic and extraordinary the World away from stocks, bonds, currencies and commodities really is?

If you need evidence of the extraordinariness of humanity, let me cite the “Super Saturday” of 6 nations Rugby we were just treated to. It was the most exciting oval-ball day the Globe has ever seen – a fantastic and much closer game than the score line suggested between Ireland and Scotland in the opener, Wales finally getting their act together against the dazzling Italians, and finally the tension as France beat England with the very last kick of the championship to secure the title. Every team won. No one lost and it was utterly, magnificently brilliant – a celebration of pride, skill and passion.

That Scotland came third on the Table was a triumph. We were the only team to beat France – the Champions. That England played so well after such a terrible season (and would have won if Boris’ rumoured lovechild wasn’t such a Pollock the Pillock) speaks masses about the resilience of the team.

Trump can do whatever the f3ck he wants after a day like that. Problem is… he probably will.

Back to the real-world….

There is a rising sense the Trump-Bluster-O-Sphere is deflating – and may be decisively popped in the November midterms as the consequences on US voters become clear. Over the weekend Trump twittered on Truth Social about banning and closing US media outlets he deems disloyal and unpatriotic on their coverage of the Iran war. Yep. That’s how it begins. Perversely Trump’s best hope of avoiding Lame Duckery is the uncanny ability of the Democrats to keep saying and doing all the wrong things.

More immediately, global markets are spinning – there is a real risk of a reversal internationally and domestically. On the upside, there are a couple of things supporting markets are present which are unusual. The first is buy-the-dip mentality, the idea that mean-reversion will mean markets return to the trend… but that doesn’t account for the fact most people active in market todays have never experienced a full-on bear-market. The real trend is not ultra-low interest rates, low inflation and govt bailouts. The second is the lack of connectivity – few folk seem to grasp how a broken cog in one part of the global markets can cause the gears of another part to crash. Consequences, consequences.

This time last week Trump was hurling insults at the UK – telling Sir Keir Starmer he wasn’t welcome to a war America had already won. Yet on Saturday the rest of the world looked the other way, ignoring his appeal to send ships to join America making the Straits of Hormuz safe for navigation.

An American GOP chum emailed last night to demand Western nations “surge” ships and resources to support America in the Gulf to avoid of a sustained global energy crisis. He argued we should put aside any doubts on Trump and join his crusade. To what end? A coalition of the unwilling risking life and limb to preserve Trump’s reputation? The only thing that will reopen Hormuz will be de-escalation – which means a Trump climb down and letting others negotiate.

I can’t see that happening. Unlike the UK during the Suez crisis when Eisenhower forced the UK to step-back from its efforts to regain ownership of the Suez Canal – who is going to tell Trump to back off? He won’t, and only power on earth able to do so will be US voters in November’s Mid-Terms. As a result, the prospects for a long-term energy shock look huge.

What non-American politician would now risk domestic votes supporting a man universally reviled by the critical young voter demographic in Europe and Asia? Trump committed his nation to a war without the approval of his national legislature – that was a massive mistake. Spreading the foundations for any blame-game is something no professional politician will have missed. (He could have asked his good chum and Board of Peace buddy Tony Blair for advice of how unpopular invasions of sovereign nations without a clear plan play out….)

Israel will be happy – they can keep mowing the lawn every few years, dropping bombs on anything that looks new and shiny across Iran, and doing deals for energy with Saudi.

To the rest of the world, Iran looks to be an unwinnable asymmetric forever-war – that will play out to the benefit of Russia and ultimately China. And no – Trump has not cleverly set a trap for China inviting them to participate in the Hormuz fleet. China has reserves, controls supply chains and will wait. Key for Europe is how quickly and securely Qatar can build a pipeline across the desert to the Med….

No one will ever deny the Iranian regime is a bad thing for the Iranians, the Gulf and the Globe – but Trump and his cabinet of sycophants will be remembered for failure on a scale much greater than Jimmy Carter’s crashed helicopters in the desert. Trump will go down for starting an ill-considered war with no clear objectives. An unwinnable war that will tip the global economy into stagflation, weakening the Gulf economies (who else has umpteen emails and linked-in’s from Dubai brokers offering cheap property this morning?), which has been bow-waved by a mounting energy shock that is still rising.

Nice one Donald.

Its no wonder global markets are now showing symptoms of dread Liquidity Flu.

These wheezing sounds from Private Credit sound like an infection on the lungs…. The coughing is getting worse as folk seek exits – to which there are none. And when liquidity becomes the fear, then wheezy markets catch pneumonia.

Time to remind you all of some of Blain’s critical market mantras:

• No 12: There are 27 doors marked Entry to the New York Stock Exchange, but only one marked Exit.
• No 1: The markets have but one objective – to inflict the maximum amount of pain on the maximum number of participants.
• No 6: In crisis a bid is a bid is a bid – hit it harder and faster than the proverbial red headed stepchild.
• No 16: Tis better to miss the last 5% of the rally, than be caught in the first 50% of the crash.
• No 23: All the glitters is not gold – especially if you can only hold it in a digital wallet.
• New Mantra No 28: Buy the dip is a winning strategy right up till it isn’t.

What’s likely to happen next is the reversal of the factors that supported upside for US and Global markets from the pace and verve of the pre-Iran US economy. These may be drowned out in a rising sense of mistake and looming disaster.

In a strong and confident market, which was also expecting rate cuts, there was optimism of how AI and AI infrastructure spending would drive the economy higher. That may now unravel as questions about rising energy costs, timing, global competition, and political uncertainty around the mid-terms start to mount.

I’d watch the looming SpaceX IPO as a bell-weather for speculative sentiment in coming months. In a frothy market it would literally fly… Now… maybe not.

Out of time and back to the day job…

Bill Blain

Author of the Morning Porridge

CEO Windshift Capital

Advisor – Spitfire Strategic Capital