2026 looks likely to be the warmest year ever. Oceans are charged with energy to drive ever larger storm systems. Wildfires and droughts are ravaging the land. What if this is only the beginning? What if the climate is about to stage a chaotic breakout? Just how resilient will humanity be to a war with an implacable enemy that will give no quarter? What might it mean for the economy?

The next few months are going to get interesting as markets react to the ongoing mess that is the Gulf, rising oil prices, wobbling stocks, rising bond yields, broken supply chains, and the reassessment of the AI “revolution”. Meanwhile, the US political cycle goes into the Mid-Terms. I would suggest everyone reads Regime Change, the new book on Imperial Trump, to understand what the last 18 months has been about.

It’s a wake up and smell the coffee sort of morning in the AI markets. AI is here to stay. Everyone is using it. Why are prices tanking? It’s about competition, adoption and data sovereignty. Maybe it’s time for a rethink? How did it get so huge so fast? That’s a question about overly cheap liquidity and speculation, which is why Tesla’s numbers are so interesting.

In the past 15 years the US economy has left Europe in the rear-view mirror. While America booms, Europe appears to be flatlining. The question is why? Americans say it’s entirely Europe’s fault: bad policies, failing politics, and lack of unity. However, the consequences of the (as yet unresolved) European Sovereign debt crisis triggered by the Global Financial Crisis of 2008 was the speedbump.

C’mon. England won, but Norway was sparkling. It’s a genuine shame they are out the World Cup, but didn’t they do well? There is much that Norway’s successful blend of capitalist social democracy could teach the rest of the West. Most countries squander their abilities and resources – not Norway.

The AI market has been diving business expectations and markets – everyone believes it will deliver a growth, productivity and profit revolution across the global economy. What if it doesn’t? What if it’s not a leap forward, but just a step-change?

NATO has been the core of the Western Alliance and Transatlantic Economy. The men in the ill-fitting Florsheim dress shoes have broken it. What will follow is uncertain, but will clearly impact global markets and geopolitics to an enormous degree. The deepening Atlantic rift puts the need for European defence, sovereignty and resilience right at the top of the priority list.

England will take a confidence boost from the World Cup win vs Mexico. The Russians will be furious – their war plan requires The West’s resilience and pride is weakened through disinformation and instability. Countering Cognitive Warfare requires the acknowledgement it’s happening, that we fight it, and acknowledge our strengths and weaknesses, and that unity wins!

Compare and contrast the USA and Britain. The new country and the old. Our problems are not in our inventiveness, our skills or our people, but in how our societies work. We suffer from Politics that don’t govern, Businesses that don’t share, and Bureaucracies that don’t deliver. These are problems of late-stage democracies in need of a reset. Politicians keep promising – maybe one day one of them will actually make changes!

2026 has been an interesting year thus far. A number of themes including AI, Geopolitics, Debt and Innovation have driven the flow of markets, which have very high upside expectations and few worries about downside risks. I would remind readers of Blain Mantra No 1: “The markets have but one objective: to inflict the maximum amount of pain on the maximum number of participants”. Hey-Ho, and on we go...