“Prepare to be assimilated species 5618.”
AI is dominating the headlines. Its either the greatest threat to mankind ever (as has been every economic revolution since someone discovered fire), or its going to make us all better off. The answer probably lies somewhere in the middle.. but it’s bound to raise uncertainty.
Monday is the May Day Holiday, but the weather is pants and no one has any money anyway… There isn’t much on the horizon that is clear – hunker down for more months of uncertainty.
Outrageous rental increases and the naked greed of professional landlords will result in a dearth of young workers priced out of London. It will destroy the City’s economy and negatively impact the UK even more conclusively than the Luftwaffe, political mistakes, global banking crisis, pandemic or recession.
SVB is a crisis averted, but the market wasn’t paying close attention which spells opportunity. There are bigger risks from central banks being distracted from fighting inflation and normalising rates. That’s the real crisis!
There is nothing as dangerous for markets as directionless markets and a deep threat board. Place your chips accordingly…
Markets have a habit of getting over-excited. They get FOMO and become over hasty. Although the outlook is improving, there is certainly little to justify some of the more speculative hype dominating market moves. Time a bit of rational thinking and common sense – consider Tesla as an example of misplaced hopes.
Delighted to hand this morning’s Porridge to my colleague Julian Wheeler, who reminds us not to fight the Fed, making the argument against deep recession and for stock market upside. Markets are about differing views and perspectives – and despite my latent bearishness, I find myself in agreement with much of what Julian says.
Watch the Bond Markets. In bonds there is truth. Brutal, uncompromising, painful truth. When the crisis comes, it will hit bond markets first.
Markets are just enormous voting machines calculating the opinion of every participant, therefore no single “idiot” can drive them.. but they can certainly influence how the other participants vote.
Last week saw a succession of fundamental shifts in how the global economy is working: inflation, China’s reopening, western politics, crypto, Climate Change, Tech stocks, and in Ukraine. These all have significant potential market implications.
