Markets and how Tech is going to kill us all

Blain’s Morning Porridge, 21st July 2021: Markets and how Tech is going to kill us all

“Gee.. I feel like a Harley Machine, tooling around like I was James Dean..”

This Morning:  Markets are fretting. Up one day and down the next? Do they believe in the dire fundamentals or inflation threat, or keep buying Central Banks juicing the markets? Never mind; hot disruptive tech stocks can only ever go up… But where do they eventually lead us? I suspect Tech will eventually kill us all…

Tuesday was an “Interesting” day in markets. Monday’s full-on wobble in global equities reversed into a buying binge as investors sensed the opportunity to buying a cheap market, at pretty much the same price it was the day before when they sold because it was an expensive market. What had changed? Precisely nothing.

You could dig into the details and guess on Monday people got scared of the ongoing consequences of Covid. On Tuesday the market voted again and decided the pandemic isn’t an issue… Basically it’s a market bouncing off the walls, looking for something to trade around. The fundamental divide between Equities anticipating recovery and Bonds pricing in recession continues.. Its contradictory… but, hey, that’s what makes some folks sellers and others buyers.

Yet, there is definitely a tinge of fin de l’age about current markets, a sense it’s all gone a bit far. We’ve got lots of well followed Uber-Bears warning the globe is on the edge of a massive equity correction and that current prices are unsustainable. On the other hand; the market is largely composed of pragmatists who swim with the current. They understand Central Banks would like to take the distortion out of markets and normalise interest rates, but are determined to avoid a major market crisis…

Which will prove the right view? Anticipating a catastrophic correction, or swimming with the flow? I’m sticking with a 20% gold allocation… just saying…

On any fundamentals, common sense measure of value, stock markets are absolutely inflated after 12 years of sluggish growth and stellar market gains. The word is bubble. But central banks can’t afford for that bubble to burst – an imperative the markets have been arbitraging since 2009 – and the US stock market is now worth 3 times what it was then. Let’s see… Central Banks bankroll the markets… Markets rise.. Is there, by any chance, a connection?

• Observations: i) The big risk to markets is Central Banks pulling support and stimulus. ii) Central Banks don’t want nervous markets.
• Conclusion: Buy.

Oh, I didn’t even mention inflation… don’t worry.. I will.. tomorrow or tomorrow, or the day after that..

Meanwhile.. Yesterday was a bit of a “I want to kill a techie day”.

I know that must sound terribly non-PC. There is probably a woke protocol about treating techies as normal people. It’s a matter of communication. I’m married to a techie, and we get along famously because we talk to each other in language we can both comprehend. However, yesterday morning was a Tower of Babel nightmare. I’d convened an emergency meeting of the Morning Porridge Brains Trust to solve the crisis of the site going dark on Monday.

It turned out a Morning Porridge reader got it absolutely right when he emailed it would be a corrupt plug-in to blame for the outage. I forwarded his email it round the team… and sure enough that’s exactly what it was… I could never solve that myself.. because Word Press don’t use phones. What was interesting was the sheer amount of bullshit bingo jargon around the table as we discussed the problem. I listened in fascination to stuff I don’t have a breeze about… and it struck me.. neither did most other people. The guy who stayed quiet turned out to be the one who actually understood, put the parts together and suggested the solution. The quietest man in the room is often the one to listen to.

Suffice to say…. We got the website sorted… and I didn’t have the heart attack She-Who-Is-Mrs-Blain feared. That got closer in the evening as my utter and complete contempt for Virgin Media rose a few notches overnight.

Yet another Virgin engineer had been booked to opine on why our Broadband service doesn’t work. There is a signal, and all our neighbours work fine. The guy didn’t turn up. I called Virgin, I chatted pointlessly with a chat bot, I sent emails. It was useless. My total time on terminal death hold was over an hour. Twice I got through to real human beings somewhere on the far end of the planet.. both said they had to get tech support on-line and left me on permadeath hold. In the end I spoke to no one, and we still have a non-functional broadband…

The problem with Virgin is exactly the same problem I was having on the website: Communication.

Which leads to me to wonder if we are approaching a New Tower of Babel Moment? When communication between individuals, companies and governments breaks down to such an extent it becomes impossible for society to carry on, then we have a problem.

The proponents of disruptive tech repeatedly tell us about the technological wonders that await us just around the corner: robotics, artificial intelligence, virtual realities, cybersecurity, and a host of other startling marvellous things coming our way. But, what do you do when it doesn’t work and no one really understand why, because it’s not their job to? How do you communicate concerns about tech when no one is listening?

I feel we’ve reached that stage with Virgin. It has evolved into a hideous blob that exists only to feed itself. No matter what you try to tell it.. its not listening. It just screams.. Feed Me Feed Me! We have made multiple complaints about the service – I looked them up on our “personal page” and discovered Virgin has resolved each one successfully. We still don’t have working broadband.

What chance of saving the planet from climate change when you can’t get broadband connected?

Individually the Virgin engineers are lovely people and the call-centre people are probably kind to their puppies, but collectively the Company should be persecuted and pogromed off the planet.

Harsh.. and a disturbing vision… but probably fair.

Top Tip: if your Broadband is pants, but a Vodafone dongle thingy for about £20 per month. It works fine.. Sell Virgin, but Voda.

Five Things To Read This Morning

BBerg – ECB Set to Rewrite Stimulus Pledge After Raising Inflation Goal

FT – “Forceful for longer”: Investors bet ECB bond buying is here to stay

FT – Greensill scandal is about more than sleaze

WSJ – Assets in Ant Group’s Flagship Money-Market Fund tumble

Troygraph – GB News gets fewer viewers than Horror Channel before signing up Farage

Out of time, and back to the day job…

Bill Blain

Strategist, Shard Capital