Markets are great at reacting to a single stimulus but are like a frog in a pan of warming water when it comes to consequential events. Forget “Black Swans” or “no-see-ums”, but figure out how the increasingly complex picture of unfolding events and consequences are driving markets!
Boris whipped the Tory faithful into a frenzy with his “wizard” economic plans, but it was empty, hollow and doomed bluster full of soundbites and repeating policy mistakes like austerity and higher taxes. It’s time for Government to get radical and retro-build the economy from top to bottom – all of which is imminently possible if they learn the lessons of the pandemic.
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.
The UK’s decision to hike taxes and put a sticking plaster on the cash-haemorrhaging NHS highlights serious issues for Soveriegn Debt Investors. Expectations on interest rates and currency markets are one issue, but the competency of governments to manage the quantum of debt raised through the pandemic and avoid rising uncertainty will be increasingly under the microscope.
The shocking return of the Taliban dominates the headlines. It has critical implications for markets. Biden’s loss of credibility creates many hurdles and could drive the US towards isolationism – bruised by yet another flawed foreign adventure. Meanwhile, markets struggle with inflation and climate consequences.
The UN has declared a Code Red Climate Emergency. As we all know addressing climate change has enormous implications for investment strategies, but can governments collectively deliver the joined-up and effective policies required to save the planet? The jury is out…
Blain’s Morning Porridge – 4 Feb 2021: Buying Boots On “Smuggling guns and arms across the Spanish border….” I am…
Blain’s Morning Porridge – May 18th 2020 – Life begins again! “There is nothing, absolutely nothing, half so much worth…
Blain’s Morning Porridge – March 2nd 2020 “I think this is serious in the sense that we can’t afford not…
