The immediate debt ceiling crisis has passed, but it’s not the end of the rolling uncertainty that characterises current markets. The pressures and tensions fuelling political division and driving maket uncertainty are set to increase rather than moderate.
Markets are focused on the immediate debt-ceiling crisis, and the short-term game of guessing rates vs inflation. Down the line are the bigger challenges of the medium and long-term: issues we need to be investing in now to garner long-run returns or just to survive!
Markets are thriving, but the news tone is miserable.. how does that happen? Markets aren’t pricing in a rising tide of political friction, plus rising inequality of wealth and opportunity – but these things ultimately matter.
The Chinese must be delighted, but Donald J Trump is not the problem, just a symptom of crisis within Democracy. The issue is how it plays out for markets in terms of future global alliances, trade, economic growth and prosperity - the signs are not looking good.
Q2 opens up with a new oil shock, but after the volatile start to 2023 what will roil markets next? Might it be further geopolitical instability?
Analysts and big money say it’s time to reinvest in China on the back of growth and rising prosperity. But global headlines point to rising geopolitical confrontation which could see China sanctioned, or even a hot war with the US. The real issue may be China’s rapidly declining demographics.
Gosh… The Rest of the World wonders how the UK has suddenly become a corruption-raddled third world kleptocracy. The optics are terrible. Even the Russians are moving out! Fortunately, there may be a solution: let’s be British about it, and show everyone we can do political knavery better than anyone else!
Good is bad, and bad is good as Kwasi Kwarteng wins the Financial Idiot of the Year award as the IMF warns about the consequences and dangers of $80 trillion of hidden swap debt and rising global debt levels. Should we worry? Probably.
How will free-market economies resolve crashing discretionary spending, wage inflation and looming recession when income inequality is so blindingly obvious to electorates? Something has to change.
“Leverage, Liquidity and Volatility upturn markets, triggered by policy mistakes, ignorance, hubris or plain getting it wrong. These are dangerous times as multiple issues threaten confusion – so some simple market mantras might help!”
