Category Debt

The UK crisis: Questions that Must be Asked: How was it allowed to happen?

The UK confidence crisis is not over yet. Chancellor Kwasi Kwarteng is saying nothing, hoping for stability. The Bank of England finds itself providing top cover by its willingness to hike rates. The Treasury Select Committee should be asking what advice the OBR, Treasury, The Bank of England and the Gilts Office gave Kwarteng.

UK Grieves as the Economic Crises Approach

As London grieves we’re not paying much attention to politics and markets – but we should. The outlook is deteriorating. Confidence is declining and will likely get worse if the new government’s lack of awareness and sensitivity continues.

Things are never as bad as you fear… are they?

The news looks bleak. A cataclysm of gloom is set to sink Europe and the UK – but, maybe things aren’t as bad as we think. Good news and a realisation things can get better could stabilize sentiment, and build a recovery base. Maybe?

Bond Markets – Don’t Panic Captain Mainwaring (but don’t look behind you…)

In bonds there is pain as prices tumble – but that does not change the fundamentals of investing in bonds. The risk is rising bond yields will expose the dangerous over-valuations low rate distortion has caused across other financial-assets, perhaps causing more than a few bubbles to pop.

If you are looking for truth in markets, in bonds there are fewer lies.

The Stock Market Rollercoaster will continue a while longer, but a decisive divergence point is coming! Corporate debt is likely to crack on rising rates, price distortion, forgotten risk metrics, and rising defaults. It will signal the perilous financial health of some sectors – bursting the current bubble violently. Anyone for the last few choc-ices?

A series of unpredictable things that might or might not happen in 2022!

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?

The Threat Board is Looking Busy

Markets are never as bad as you fear, but never as good as you hope. The Threat Board has seldom looked so complex: we can try to predict outcomes, but its notoriously difficult. The list of potential ignition points seems to be expanding exponentially: Energy Prices, Oil, Inflation, Stagflation, Supply Chains, Recession, China, Politics, Consumer Sentiment, Business Confidence, Property Markets, Liquidity, Bond Yields, Stock Prices.. you name it and someone is worrying about it.

Freedom? Markets and Climate Chaos

Its “Freedom Day” in the UK, but it feels same as, same as. Bond markets look stressed, but freak weather is raising the probability government intervention dwarfing the scale of the pandemic may become necessary. There will not be a gradual, ordered progression to a new higher temperature climate.  Instead… the reality looks like high-cost chaotic freak-weather events becoming increasingly common.  The cost could hit trillions.