As the Dow pokes 40K, markets remain exuberantly frothy! Labour produces a list of 6 priorities designed to reassure voters they aren’t rampaging social-communist revolutionaries intent on overturning everything, (Keir Starmer? really?) demonstrating instead their intent to be better Tories than the Tories. Disappointing. They missed the critical issue, Housing, from their list.

This is the outline of a talk I've been giving in recent months on the dangers of ignoring the behavioural lessons from the QE Era as policy makers get ready for the inevitable next financial crisis. The great thing about financial crises is there will always be another one - no point panicking today when you'll get to panic again tomorrow! 

Whatever the Fed says or does today, markets have reached a cusp. How will they adjust to the reality of new higher, normalised interest rates: throw their toys out the pram, or acknowledge higher rates are the building blocks of a stronger economy?

Markets should be relieved at the US reaching a bipartisan deal on Ukraine and Israel, but will likely be fixated on the current stock market wobble – which could turn sour. The real issue is how the weekend US deal clearly focuses the US vs China, and that has massive market and economic implications.

Very early start on the radio this morning, but Jamie Dimon and I are aligned; the global economy is at an inflection point as higher rates, stickflation, debt and climate costs hit the reset button. It doesn’t have to be a bear-reset and could present massive opportunities! Embrace change!

Despite the robust US economy, the market’s prime concern remains when and how quickly the Fed will ease interest rates. What if they don’t? We’re heading into a new normalised post GFC interest rate environment, and long-term higher rates will be a good thing!

The nations of the West face crisis: how to fund vital infrastructure and critical defence spending without upsetting bond markets? They are worrying about the wrong things. Time to rethink government spending and how to do it.

Is it just me that finds Christmas and the Holidays to be overly stressy? They will be over too quick, and we’ll all be back as confused as ever. Here are some thoughts and predictions for 2024. The one thing I guarantee: The World is Changing.

Markets are poised for the strongest year finish in decades, anticipating early rate cuts and upside in 2024. Meanwhile consumers wrestle with wages falling behind costs, while businesses struggle with debt. The gap between expectations and reality is simply too wide – and will become increasingly apparent.

The Fed is going soft, while the ECB and The Bank remain tough on rates and inflation. The market is watching the numbers, but the critical element is the need to normalise real interest rates to restore the functionality of the market economy.