Category Inflation

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?

2022 Outlook – Politics will be a worry, but Credit will be the Big Risk

Let me present a list of things to worry about next year. Inflation, US and China growth, Stagflation, Central Banks, Stocks, Climate and Equality, etc, etc.. But the big risks will be the consequences of US Politics and a Liquidity Meltdown in the Credit Markets.

The Central Bank Quandary: Inflation vs Recovery

Jay Powell keeps his job and faces the inflation quandary – hiking rates too soon risks recovery, but inflation needs addressed. The likelihood is lower rates for longer – which will juice euphoric markets further. What’s the alternative? Stop buying financial assets and buy the real economy!

What would a Multi-Sigma Bond Slide do to Markets?

The risks of Central Bank policy mistakes are escalating. Fixed Income markets are wising up to the potential of long-term stagflation/inflation. A bond correction will crush stock markets if/when real interest rates turn positive. Central Bankers will need to decide: intervene to save markets – continuing the current distortions, or let loose the dogs of market meltdown. Anyone for the last few choc-ices?