Good is bad, and bad is good as Kwasi Kwarteng wins the Financial Idiot of the Year award as the IMF warns about the consequences and dangers of $80 trillion of hidden swap debt and rising global debt levels. Should we worry? Probably.
Last week saw a succession of fundamental shifts in how the global economy is working: inflation, China’s reopening, western politics, crypto, Climate Change, Tech stocks, and in Ukraine. These all have significant potential market implications.
Elections are a wonderful way to unravel the risks of political incompetency by letting the people, rather than politicians, decide. Meanwhile, the collapse of another thing in Crypto comes as no surprise. If it did, consider a career change.
We’re officially in a bear market, but markets are still massively overvalued. The laws of Mean Reversion are immutable – some stocks are going lower. Inflation, Bond Markets and Confidence are all flashing danger signals.
Crypto has fallen 30% through May. The headlines about scams, illegality, and outright theft obscure the key facts; its overly complex, vulnerable and doesn’t actually do anything we can’t already do better. It’s terribly clever, but a pointless, busted bubble.
NFTs are in the press for all the right reasons – insider trading, zero value and scams, but as digital assets in a digital world have enormous potential – for making your wallet lighter….
April 2022 will go down in market history as the month it all became obvious.. But what? That the global economy is in need of repair, markets are overly euphoric and consumers can’t consume when they are broke.
Some investment banks are picking up cheap Russian assets – which negates the purpose and aims of sanctions, and will simply fuel Putin’s propaganda machine. Meanwhile, Blain’s stupidity index is only down 38% - which shows there are still greater fools out there…
Tech stocks have taken a thumping this year – a well-timed reality check or a threat to bring down the whole market? Probably time for a clean out of all the speculative, improbable and fantastical perpetual motion machines that beguiled IPO and SPAC investors during the easy money era. Reality bites and it’s time to get real..
Occasionally the Morning Porridge strikes a lucky insight on markets – this morning here are some thoughts on how 2022 markets and events may or may not develop. If they occur I shall hail myself an investment genius. If not, can we quietly forget them?
