Football, Recession, Stocks and Nations – so much to look forward to!

Christmas is coming, but plenty still to think about in terms of markets; from the lessons on Covid re-opening in China, what Tesla’s shareprice tells about the resurgence of common sense, and the prospects of 2 years of dither into the very necessary general election the UK needs to move forward!

Blain’s Morning Porridge – Dec 19th 2022: Football, Recession, Stocks and Nations – so much to look forward to!

“Oh, the weather outside is frightful, and the fire is so delightful..”

This Morning: Christmas is coming, but plenty still to think about in terms of markets; from the lessons on Covid re-opening in China, what Tesla’s shareprice tells about the resurgence of common sense, and the prospects of 2 years of dither into the very necessary general election the UK needs to move forward!

Less than a week to Christmas! Ella Fitzgerald’s Christmas Album is on the turntable, She-who-is-Mrs-Blain and I have danced to her favourite, George Michael’s “Last Christmas”, while I have finally cracked the chords to Greg Lake’s “I Believe in Father Christmas” (only taken me 47 years!)

I intend to use this final week of 2022’s markets to muse about random aspects of markets that interest me – and hopefully readers also. The news is about China Covid fears, the likely depth of recession, and where energy prices are headed…

But first: what I know about football can be written on the back of a small postage stamp, with plenty of room for others to contribute. Yet, last night’s Messi vs Mbappe World Cup Final was something else. Stunning. The two greatest sport-stars on the planet – ably supported by Argentina and France – overcame the doubts, the naysayers and ended the Qatar tournament on a high. My son was cheering for Messi. I would choose to be French if I wasn’t Scots. It ended in penalties, where the superiorly cynical gamesmanship of the Argy-Keeper won the day

President Macron trying to comfort the obviously shattered Mbappe at the end was quite something – the Frenchman’s World Cup will come! Through the tournament he’s come across rather well: articulate and clever in English and French. Great things ahead for him I predict.

Now the World Cup is over – what did it all mean? I spotted one bloke at the final waving a Chinese flag – curious as the two largest nations on the planet (China and India) didn’t qualify for the largest knockout sports tournament in history – but are massive sports marketing markets.

Around the globe everyone was watching – except the Americans… which might just tell us something. The Shermans might own most of the top clubs, but they remain somewhat confused and bewildered at why no one else is interested in their version of “football” – played with a small-sized rugby ball and is largely about over armoured man-childs throwing and catching rather than using the foot to score.

Whateva… as they say…


2022 has been a fascinating year. The tapes are full of bleak predictions about how bad it all might be as politics, war, inflation, resources, commodities and other economic breakdowns threaten to overcome us all. Yet, I am fundamentally hopeful. Humanity and markets have history when it comes to working our way out of crisis. “Muddling-Through” is the basis of the UK’s entire National-Resilience strategic plan!

In terms of markets 2022 has seen a resurgence in common sense in terms of the way folk think about markets. A healthy sense of scepticism creeping back into the investment process – anyone still invested in NFTs, Crypto or other such nonsenses should be profoundly concerned.

Markets are a learning experience – often relearning and reminding ourselves about the basics! A few fundamental questions on the likelihood of being repaid money lent on debt, or stripping out facts from the froth of stocks are basic. The importance data and numbers, of strong management, finance officers you can implicitly trust, liquidity and transparency are all critical. Due diligence of opportunities has never been more important.

There is increasing pragmatism across markets – even the most earnest ESG led investment committee is coming round to the understanding we won’t triumph against climate change unless we also have growth to fund it!

2022 saw the end of the easy money myth that drove improbable meme-stocks and insane disruptive valuations. It’s all so over. It all makes me rather positive on the coming year!

The poster-stock for this new, new reality is Tesla. The stock is down 62% this year from $402 to $150 – yet it still trades on an extraordinary multiple of 46 price/earnings ratio. Elon Musk has been superseded as the richest man on the planet. I’ve been saying it would happen since 2017…. The fat lady is still to sing.

Why the crash? Tesla makes decent cars, and leads the new EV sector, but the stock price has further to fall on the basis of common sense and rationality. Competition has mounted across the EV sector – everyone is making EVs and some are just as good, if not better, than the rather limited and jaded Tesla offerings. Fully autonomous driving is not happening anytime soon. Lithium batteries and EVs in general are increasingly threatened by costs, supply and, at some point, future obsolescence as the carbon account is revisited.

When Tesla is trading at a P/E of 12 I will be taking an interest. No doubt the stock will bounce on the launch of the pick-up truck next year – sell into it!


It’s been a remarkably bad year for the UK. 500 years of Virtuous Sovereign Trinity (stable currency, sustainable bond market, and political stability and competency), went by the wayside over a few days in September. Inflation peaked at 11.1% while interest rates have “soared” to 3.5%. Stagflation is nailed on through 2023, and few folk trust the Bank of England’s assessment of a shallow recession.

Yet, sterling has rallied back from the bleakest days of the Trusterfluck, mainly because Rishi Sunak has proved to be an “adult in the room”. Well done to him. He is still surrounded by the same guys that have presided over the fastest tumble of a G7 nation into economic irrelevance in recorded Economic History.

Does the recent stability mean the UK is out the woods? Definitely not – there are few signs the economic damage of Brexit will be addressed any time soon, trade deals remain vague hopes, and pressures on government are mounting.

The government’s only strategy is to hang on by its fingernails hoping a) for an economic miracle, or b) the public will swing to their side versus the unions. The current round of national strikes was predictable: public sector workers demanding wage increases to cope with galloping inflation, and to keep up with private sector pay awards threatens to create another crisis of confidence at the centre of government.

The government’s argument that paying Nurses a living wage would result in chronic hyperinflation and break the national piggy bank is bogus – its an ideologically driven nonsense, and is set to further divide the already fractured party. The strife could easily be avoided as a rounding error on the national accounts. Labour, the likely winners of the next election are sitting back, taking it all in, letting the government beat themselves.

The problem is the longer this hiatus continues – the Tories clinging on and Labour waiting to pounce the more rudderless the nation becomes. We need the cathartic shock of a new government, new policies and new beginning to move back towards growth. I’ve been asking my city contacts how they intend to vote come the general election.

Most are like myself – pragmatically reckoning this Conservative government has run its course. 12 years is long enough for any decent government to hold power before it goes stale – and this one has been effectively broken since Brexit, only winning the last election because of Boris’ sheer electability vs the ultra-lefty-looney Jeremy Corbyn. I voted for them twice, and won’t be making that mistake again.

Most rational observers of UK politics conclude Labour leader Sir Kier Starmer may not be a great performer at the dispatch box, but he’s assembled a competent front bench team, and critically has purged all the constituency parties of potential far-left candidates. He might not have the marketability of Tony Blair – but at least he could restore a level of political competency.

There remains a significant minority of my City contacts who cling to old mantra: “how can you possibly consider voting Labour… they will destroy hope, opportunity and growth, our children’s futures… blah blah blah..” I’m interested to know exactly how they will out do the Tories in any of these respects!

My big hope for 2023? That the UK moves on.. and when the new government is in place, I will be as nasty and mean to them as I was to the Tories…

Five Things to Read This Morning:

FT                                Nouriel Roubini: “I hope I didn’t depress you too much”

Torygraph                   The Pound will collapse if the global economy falters

BBerg                          France’s EDF delays Restart of Nuclear Reactors in Blow to Energy Supply

WSJ                             Goldman Sacks Plans Thousands of Layoffs

New Scientist              A family tree of humanity shows how we are all related

Out of time, and back to the day job!

Bill Blain

Shard Capital, London


  1. “the Frenchman’s World Cup will come…”

    May I kindly recommend a look at the 2018 result and line-up 😉

  2. Here’s one American who watched the FIFA Final, and a ton of the earlier matches! And I know quite a few others here in sunny but cold California who were equally enthralled by the past month’s proceedings.

  3. “President Macron trying to comfort the obviously shattered Mbappe at the end was quite something.”

    It was a spectacle to behold, Macron attempting to remain relevant by chasing the spotlight wherever he can. Was it my imagination or did Mbappe attempts shake off the cloying politician now once but twice?

    On American football versus the rest of the world, it should come as no surprise that my countrymen prefer brute force to finesse in sports as in all other endeavors.

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