Blain’s Morning Porridge April 16^th, 2026 – Stock Markets and Common Sense.

“There is a knack to learning to fly. It lies in learning to throw yourself at the ground and miss.”

Stock markets are on a buzz. Central banks are expected to ease immediately. Joy unlimited. What war? Peace in the Middle East! Really? There are none so blind as salesmen wanting to talk a market higher.

Link to Podcast

Blain’s Market Mantra No 1 states; “The market has but one objective: to inflict the maximum amount of pain on the maximum number of participants.”

Global stocks are at an all-time high, sniffing the nitrous oxide of an Iran peace deal around the corner. Donald Trump is tweeting about his great relationship with China. Tech stocks are off to the races. The American aircraft carrier, the USS George H.W. Bush, is taking the scenic route round Africa to the Gulf – the most powerful navy on the planet doesn’t fancy messing with the Houthis in the Red Sea.

I am remined of a scene from Blackadder: “When I joined up, it was the prerequisite of a British campaign that the enemy should, under no circumstances, carry guns. Even spears made us think twice. The kind of people we liked to fight were two feet tall and armed with dry grass. … Ten thousand Watusi warriors armed to the teeth with kiwi fruit and guava halves. After the battle, instead of taking prisoners, we simply made a huge fruit salad.”

I was chatting to a stock-picking chum who told me something like: “Bill, you don’t need to keep writing Iran is a stupid war, chosen by an idiot. We know that and what matters is what comes next. The war will soon be over and forgotten. Markets will rise.” He effectively dismissed the war as irrelevant. Maybe he is right.

There is a chap quoted on Bberg this morning: “Traders across Asia are clinging tightly to the hope that a new round of US-Iran peace talks will materialize in the coming days. The sight of oil trading at sub-$100 levels and hopes of a diplomatic breakthrough are combining to breathe life back into equities.”

Is this the markets learning to live with the Iran War, or just blanking out reality? Blink and you missed 20% of global oil supplies are still trapped in the Gulf. Do I worry too much?

I am increasingly going to take comfort in another one of my mantras: “In Bonds there is truth.” I think I might add a codicil: “In Stocks there is pharmaceutically enhanced optimism.”  As a deeply pragmatic, dour bond guy nothing surprises me more than the eternal sunshine of the stock market’s mind.

• I perceive a global economy teetering on the edge of tectonic scale geopolitical shifts, rising social unrest (on inequality and forgotten younger generations), political instability, spiced with massive risks of bond market disruption, supply chain dislocation, conflict, trade wars and demand shocks.
• The stock market’s rally is trying to convince me we face a happy, shiny future of opportunity and corporate resilience, driven by Goldilocks economic conditions and liquidity. I, apparently, fail to appreciate just how strongly markets will bounce back, fuelled by abundant liquidity and strong growth, rising consumer demand and higher corporate earnings. AI will drive the upside. What’s not to like?

I’ve seen this before. Hey, ho… which leads me straight to Blain’s Market Mantra No 2: “Things are never as bad as we fear, but seldom as good as we hope.”

The coming months are going to be interesting.

The market wants to rally. This morning Pimco is on the wires snapping up European bonds as overly cheap in the face of peace. Earlier this week the Vampyre Squid’s (Goldman Sachs) Fixed Income traders got hosed for being the wrong way on rates ahead of Iran (they were long and expected easing). But now global stock markets are off to the races.

The S&P finally broke 7,000 y’day – all because the President said the war will end “almost immediately.” This is the future. Ignore the downside and buy the up! (In Space, nobody can hear you scream.)

As a deeply pragmatic bond guy I worry about risk and probability. My stock-picking chums are more than willing to “eliminate the negative and accentuate the positive”, believing six or seven impossible things before breakfast.

A good example is Allbirds. It was a failing environmentally minded maker of woollen sneakers that was once worth $4bln (when people thought it fashionable to care about the planet), but last week sold for $39mm. And then it announced a “pivot” to become an AI firm: NewBird AI, which will provide “AI Compute Infrastructure as a fully integrated GPU-as-a-service (GPUaaS) and AI-Native cloud solutions provider”. WTF that means I have absolutely no idea, but it will be parroted by thousands of stocks salesmen working from boiler-rooms in coming months. The stock soared higher than ever a bird flew – up nearly 600%… Ah, the power of belief in AI.

Or how about Elon Musk’s latest wheeze to convince markets he’s still full of boundless ideas and insights – Terafab. Seriously… it’s almost as daft as Trump believing he could win in Iran. It’s getting attention because no one is calling it out.

Terafab is the plan to spend a couple of trillion dollars building a very, very big chip fabrication plan next to Tesla’s Texas Gigafactory. (It’s called a Terafab because “Tera” is bigger than “Giga” – just like Spinal Tap’s speakers go from zero to 11.) It will design and make chips on sight and build the computers to use them on a single site. Wow. What utter genius. Wonder why no one bothered to do that before? (It does make sense to reduce reliance on Taiwan chips, which is why Chinese war planners have already got the GPS coordinates loaded.) Musk says his new chips will drive his cars, robots, space-based data centres and is part of Musk’s vision for Musk AI to be the future.

Thankfully its unlikely to ever happen… It’s going to be incredibly difficult, and Musk is never doing less than 6 other equally important things – like tweeting Grok generated AI pictures of undressed ladies to everyone. Musk wants it to happen overnight – which means it will fail…. But if it boosts his stock price in the meantime… what’s not to like…?

The bottom line is markets run on sentiment and liquidity. Even when traders are fearful, they still need to invest. When there is so much money to put to work and they also believe in buy-the-dip, the Fed Put, and the never-ending-happiness of tech stock upside… what’s not to like? As soon as Iran is off the headlines, and we stop worrying about it, the markets will move on. They will bid themselves higher in the sure and certain knowledge central banks will swiftly ease rates and AI will make every company more profitable… and therefore stocks will boom as earnings expectations soar.

Heaven help us….

Never forget the old trading adage: “Markets can remain irrational longer than you can remain solvent.”

Out of time, and back to the day job.

Bill Blain

Author of the Morning Porridge
CEO Windshift Capital
Advisor – Spitfire Strategic Capital

Please don’t forget about my new book, The Battle For Hamble. It’s a proper grown-up examination of how bureaucracy has failed: a tale of Greedy Corporates, Bad Planning and Economic Illiteracy. It explains how a wholly unnecessary Gravel Quarry will be dug in middle of a prosperous village – putting 6000 jobs at risk. The truth is no one wants gravel, and the quarry company understands it’s not what you dig out, but what you stuff back into a hole in the ground that matters. Gravel sells for £30 a tonne – Landfill earns £150 a tonne to bury. Go figure.