Markets are all-a-wobble as the AI revolution morphs from a picks and shovels Klondike into a “who is going to make most money” proposition. About time. Who will be the winners and losers in the long-term. In the short-term there is going to be pain and losses as the current high-water retreats.

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.

There may be multiple storms and whirlpools on the horizon, but the market remains convinced it will weather them all. That’s a sign of dangerous times. There are times to let the boat run free, and times to trim the sails and slow before something breaks with catastrophic consequences: will it be the AI Bubble, Debt, Iran & Oil, or a No-See-Um?

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?

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...

The success of Western Capitalist Economies is founded in the Rule of Law, Trust and competent Democratic leadership. Break confidence is these, and the economy becomes a free for all, with powerful bullies taking all they can while the weakest in society will wither. Is it a film script, or what’s happening now…?

I am genuinely excited by the SpaceX IPO. The valuation means I won’t touch the stock with a bargepole, but it should be a great business with multiple opportunities ahead of it. However, I suspect it will become another story where Musk promises much in terms of solutions which don’t get delivered.

Why are markets so high when the global outlook, trade and domestic politics look so vulnerable? Is it because investors perceive that corporates hold such power in the economy, they now set the agenda? What the global economy may need is a reset, but at present there are few signs the problem of power and wealth inequality will be reversed or addressed.

Today is the 81st anniversary of VE Day – the end of the Second World War in Europe. Markets are fixated on rising stock prices and probably won’t notice. Complacency is the danger. The Wars in Ukraine and Iran highlight success and failure and point towards a very different future world than the expected one. There are massive implications for markets – but that’s a tomorrow problem for markets focused on “now”.

The markets are on a tear convinced normalisation is around the next corner. Yet they ignore the reality the Iran war has done significant damage to the global outlook – even if Tehran and Washington kiss and make up tomorrow. I don’t claim to understand the madness of markets and their ability to keep fooling themselves, but I do follow economic history and how events change outcomes.