Word of the Year? Distraction. Markets are Distracted by Noise and Nonsense.

The markets are distracted by a host of crises. Somewhere in amongst it all is clarity.. but for the time being its noise and nonsense!

Blain’s Morning Porridge – Nov 1st: Word of the Year? Distraction. Markets are Distracted by Noise and Nonsense.

“Build back better. Blah, blah, blah. Green economy. Blah blah blah. Net zero by 2050. Blah, blah, blah. This is all we hear from our so-called leaders. Words that sound great but so far have not led to action”

This morning: The markets are distracted by a host of crises. Somewhere in amongst it all is clarity.. but for the time being its noise and nonsense!

The Collins Dictionary Word of the Year is Permacrisis – how apt. I have some other expressions to suggest, like omnishambles, and others too rude to print, but I would elevate Distraction to my word of the year. As in: There are too many distractions, distracting us from the business of markets. Sometimes you just need to ignore the noise, go with a hunch and pile in.

Permacrisis, Omninshambles, clusterf*ck, you name it. They are fun descriptions to disguise the new, new reality of we just don’t know. Shocking European inflation figures. The Energy threat. Central Banks hiking. Employment Data. Corporates collapsing as higher rates slaughter them. And politics going nowhere. Our problem is joining all these separate points and trying to draw coherence from them.

Cheer up.

It could get worse, although as I finally get to write the Porridge about 2.5 hours late… I am wondering why. I made the mistake of catching British Rail on a wet blustery day – why should I be surprised half the trains were cancelled, and the rest running slow?

But there is upside. My big project for today is to buy Greta Thunberg’s new Climate Book – 100 different perspectives on aspects of the crisis. I make no secret that I am a massive fan – and I suspect we underestimate just how well Thunberg is supported by younger voters.

Maybe because I’ve watched too many vacuous political interviews recently, Thunberg sounds brilliant. Whatever you think of the rights and wrong of climate politics, she is quite astonishing in terms of her maturity, (she is 19!), her ability to listen to and answer questions, and despite her “superpower” of being on the autistic spectrum, she comes across with real humanity, and even to be funny at times. There is a greater likelihood our great grandchildren will remember Greta Thunberg for all the right reasons rather than Cruella, Petty, Penny, Mims, Therese, or the rest….

So, I popped into the Waterstons at Waterloo to buy the book, and they were sold out. The very helpful girl on the desk checked, and every store in London sold out the book this morning. You will not be able to give away party political manifestos come the UK General Election.

And there is a message in that for politicians. The popular misconception is all conservative voters are dull, boring, white middle-aged guys like myself. They may be. The reality is UK voters are getting older, but the two most predictable voting groups in the land remain “elderly conservative” voters who made up 26% of the electorate in 2019, and “young labour” votes who were 24% at that election. (University of Bath) Young voter go green and are in the ascendant.

Meanwhile, back to my thread this morning…

Trying to come up with unique economic and market insights on a delayed train is …. Difficult. My only insight this morning is about the need to remove “distractions” to focus on what’s critical.

Let me explain:

Short-lived Tory Chancellor Kwasi Kwarteng gave up on his 45% tax cut because it was a “distraction”. Liz Truss then removed Kwarteng because he was a “distraction”, before she also was bundled out of Downing Street as a “distraction”. Begging the question why new premier Rishi Sunak is sticking with Cruella Braverman when she is clearly a massive political distraction. Who knows, maybe she is a useful distraction, distracting attention away from what Sunak is really trying to do to balance the books.

But the thing that grabbed my attention this morning was a line from some market research: “I can’t think of a single reason to be long this market.” That’s inciteful! But it also misses the point the Dow has just posted its biggest monthly upside in nearly 50 years despite the doom, gloom, misery and angst. And, as a chum pointed out this morning, Apple is now worth more than the whole FTSE 100 Index! (As BP makes a £8 bln profit, enough to fix the NHS for about 30 minutes, don’t be distracted from buying UK Inc by all the political distractions.)

Meanwhile, I am trying to figure out if I continue to bother posting the Morning Porridge on Twitter. I am not an Elon Musk fan. Can Twitter add anything to the distribution of the Morning Porridge? I am unconvinced – but anyone has insights, please share them below. I just don’t know, and was amused to read the banks holding $12.7 bln of Twitter debt to fund Musk’s hostile bid don’t know either. (They are going to hold the debt till some kind of business plan becomes clear – really a clear plan from Musk that doesn’t feature 420 reasons for not taking it seriously?)

With interest rates still set to rise dramatically – and Goldman Sachs has now gone against other US banks which thought we were close to the top with Fed Funds – its likely speculative credit and buyout bonds will trend wider, meaning banks either haemorrhage cash to sell their Twits, or risk long term collapse in their mark-to-market if Mush fails to save it. With other social media, news outlets vastly out-followed than Twitter, you do have to wonder what Musk can possibly do to give it relevance?

Give it as platform to QNON? Hand it to Putin and Trump?

I was amused to read Elon Musk as taken over 50 of his most trusted Autonomous Driving engineers from Tesla to Twitter. They will apparently be writing and checking the new code Musk is demanding Twitter employees need to urgently deliver to meet his new plan – if they don’t work 32 hour days and deliver by Friday he will feed them to his pet Kraken.

I’m intrigued Musk can spare 50 data/software engineers for secondment to Twitter. He has been promising us full autonomous driving for years, that’s its tomorrow delivery thing, thus we can only assume Musk’s reallocation of scare technology resources to the project means a) it’s just about ready, or b) he’s finding something useful for them to do… because the stark reality is his much vaunted and leveraged play on AD is bollchocks.

For years I’ve been told Tesla justifies its 86x Earnings PE on the basis everyone can monetise their cars as Autonomous taxis and owners can be driven home from the pub.

Autonomous driving will happen. In decades rather than years, and everyone will have to use it. (I do suspect the authorities will insist all new cars should include advanced driver systems, because they do contribute to safety.)

Last week, Ford and Volkswagen abandoned their autonomous driving project, Argo AI.  “The profitable commercialisation of level 4 advanced driver assistance systems will be further out than originally anticipated”, said Ford President Jim Farley. The firms have discovered the stark reality its now easy to move from level 2 – level 3 in terms of diver assistance, but the move to level 4 looks much more cripplingly expensive, while full Level 5 assistance is completely out of reach. If level 4/5 autonomous driving ever happens the two firms have concluded it will be then worth buying such a system “off the shelf”, and offering the considerable safety gains from existing driver-help systems will be a marketing gain.

Which is probably why Musk ain’t too bothered switching his engineers to sorting Twitter. He will be bothered when the market appreciates Tesla is nothing more than a car co – a good one, but just an auto maker. (And how much will sorting Twitter prove a “distraction” from my main hope for Musk – that Space X will send him to Mars!)

Finally, there is nought so strange as folk:

Back to my train odyssey this morning. Not only was the train delayed and full after the ones ahead were cancelled, but I was stuck next to a woman who decided it was very important the whole carriage could listen as she loudly monologued the lady next to her. The woman was so blithely unaware of how ridiculous she was I was tempted to ask if she was a Tory MP…..

She could not stop talking. Loudly. While gesticulating. The lady listened and nodded politely. (They were acquaintances from work – which I gathered is a large US bank with offices in London and Bournemouth). As the woman bragged about her many kids, their swimming lessons, their weekend sleepovers, the other lady was desperately trying to signal her disinterest and desire to read her newspaper. Nope. The woman droned on about the lack of internet and a host of other inanities including a remarkable soliloquy on how to dry to laundry during the winter. She went on for the whole journey – barely troubled with the occasional need to draw breath.

Fortunately, not one was carrying a handgun, although I’m pretty sure the bloke standing next to me was thinking about bludgeoning her to death with his laptop. The whole carriage would have politely looked the other day.

She was a distraction.

So is UK Home Secretary Cruella Braverman. I give her two weeks – tops. She’s complaining she’s the target of a witch-hunt (well, she was saying it on Halloween, go figure) over her leadership of the immigration crisis. Apparently, we’ve been invaded. (Clue – ask Ukraine to explain invasion to her.) To be fair she only recently inherited it from Petty Patel, and she’s only in Cabinet because Rishi Sunak needed to placate the right-wing ERG, with the added advantage of cutting a grubby deal with her avoided Penny Mordaunt being able to reach 100 proposers.

However, the shenanigans around appointment is the top news item and getting as much attention as the austerity budget Sunak and Chancellor Jeremy Hunt will drop on the economy later this month.

No time for 5 things

Out of time and back to the day job

Bill Blain

Strategist – Shard Capital


  1. Hi Bill,

    You know the analytics better than I do, but probably worth staying on Twitter until at least Elon Musk comes up with a plan. Until subscriptions work, if ever, giving advertisers a reason to stay is key to making the deal work financially and I don’t see how allowing it degenerate into even more of a cesspit, eg, bringing Trump and his worst fans back, helps that.

    Small typo in fourth line of “Last week, Ford and Volkswagen… paragraph: “driver” assistance rather than “diver”.

    All the best,


  2. You asked, “Can Twitter add anything to the distribution of the Morning Porridge?”.

    What do your analytics say?

    For the blog I run (very different topic), Twitter is currently driving about 15% of visitors, which seems reasonable to me. During the summer, when my total visitors are lower, it drives around 30%.

  3. Bill:

    We are of the same opinion about the Great Elon but on Grim Greta we differ. Don’t know if you caught her appearance on Sunday night at London’s Royal Festival Hall to promote her new ‘Climate Book’, but here is a direct quote:

    “There is no back to normal. Normal was the system which gave us the climate crisis, a system of colonialism, imperialism, oppression, genocide, of racist, oppressive extractionism. Climate justice is part of all justice; you can’t have one without the others. We can’t trust the elites produced by this system to confront its flaws.”

    As one of the very minor elites produced by the system of free enterprise I simply don’t trust a 19 year old high school dropout to navigate the planet through its current travails.

    Better vacuous political interviews than appeals to storm the ramparts with peasants bearing torches and pitchforks.

    Guy Fawkes Day looms…

    • This is where we differ…
      I think her quote makes a point.. Social justice is a thing, it is an issue, and it has inflicted many wrongs.
      Climate justice is part of the wide scope of social injustice. The elites of the West have to wake up to it. The western elites are not neccessarily evil, but we can’t congratulate ourselves for how we addressed and ended slavery, fought tyranny, have mitigated racism (to a large extent), have identified gender issues as “unfair”, if we continue to deny the injustices of income and opportunity inquality, and the injustices perpetrated by climate abuse.
      Bandiera Rosa, Comrade!

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