Markets remain obscure and uncertain, but the UK’s virtuous sovereign trinity and financial exceptionalism is at stake as political graft mounts and a previous financial scandal comes back as a new one – the Libor Scandal needs investigation.
Markets are focused on the immediate debt-ceiling crisis, and the short-term game of guessing rates vs inflation. Down the line are the bigger challenges of the medium and long-term: issues we need to be investing in now to garner long-run returns or just to survive!
Two parts this morning: What the Bank of England actually said, and The Big Lesson from the Ukraine War is simple: “Things are seldom as bad as we fear, but never as good as we hope.” Global geopolitics and markets have taken a knock, but will coalesce around whatever new global links emerge.
What does £5.40 a coffee tell us about the economy? That inflation is sticky. Do we face a stagflationary bust or a reflationary boom? Either will mean Central Banks have failed. At the heart of today’s economy are a succession of issues to resolve – not least is the need for a reset on corporate behaviours to drive stable growth.
Markets feel directionless, demotivated and listless as we wait for the next impetus to emerge – problem is, it might be a shocker.
“Prepare to be assimilated species 5618.” AI is dominating the headlines. Its either the greatest threat to mankind ever (as has been every economic revolution since someone discovered fire), or its going to make us all better off. The answer probably lies somewhere in the middle.. but it’s bound to raise uncertainty.
“Curiously, the only thing that went through the mind of the bowl of petunias was; Oh no, not again..” Inflation is what inflation is.. Prices are still rising, Central Banks are watching, the US debt ceiling crisis will distract us all, and Donald Trump remains… “extraordinary”. All feels a bit unstable.
Aviation is booming. Airlines are buying planes. Passengers want to fly. There are just a few little problems... There aren’t enough planes. That makes Aircraft as an Alternative Asset a great investment opportunity.
The Market Commentariat think deflation will counter inflation, rates will fall, and recession will be limited. The world is more complex - supply side factors are more volatile. Stagflation is a more likely outcome than recession.
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