Blain’s Morning Porridge Sept 29^th 2026 – What kind of Crisis is Approaching?

“La, La, La… We can’t hear you… We’re not listening…”

Markets are worrying about a short-term interest-rate/inflation triggered correction, but something deeper may be approaching – a convergence between market, economic and political failures. It may be time to hedge against consensus expectations of “it will all be fine” and focus on factors like national resilience in terms of what nations thrive and which won’t!

LINK TO PODCAST

Key Takeaways

• Markets appear to be heading into risk-off territory as expectations are scaled back by inflation and rates. However, the crisis may be deeper than expected, not just around market expectations, but politics and society also.
• Political disappointment and rising social fears are feeding populism – which is why the hard-right populists are on the ascendant in Europe. Trump shows how it’s likely to work out – badly.
• Trump is not the problem – he’s a symptom of what’s wrong with economics and politics.
• Economic stability depended on alignment between consumers and producers under democratic free-market capitalism. That’s breaking down as income and opportunities equality diminishes, and politics runs out of money to fix decaying economies.
• The crisis, when it comes, may be much more significant than just a price corrective move in markets.

Sorry I did not get a Monday Morning Comment out y’day – early train to London, and then straight into a Defence conference. Thus, this morning’s Porridge has a Monday morning feel to it as some of the stuff I was thinking about yesterday has made the cut this morning.

I am increasingly convinced it’s time to position for the risk-off. My spidey-senses are all a tingle. My reasoning is the increasing disconnect between short-term political cycles, a market focused on the here and now, and long-term social changes. This is what economic philosophy is all about – connecting all the strands.

• Financial markets are worried about a short-term correction on the back of expectations getting ahead of reality.
• But, there is a more fundamental economic Armageddon-flavoured long-term societal theme gaining momentum.

Wake up and smell the proverbial coffee…

Society is a pile of rocks that rest up and support each other. Individual pebbles often tumble down the hillside. But there are times when they threaten to become a landslip. Such a moment may well be approaching – and has been a long-term developing.

As the Morning Porridge keeps warning… the World is changing, and changing fast. It will have enormous implications across how you live, retirement prospects, investment returns and the fundamentals we consider the foundations of today’s markets… Tomorrow may be very different.

Maybe it’s the sense of doom and gloom, maybe it’s the quality of political parties, but Voters increasingly perceive something wicked this way comes, and it’s beginning to feel more immediate and imminent… The success of capitalist free-market economies over the last 150 years was because voters/consumers and businesses/producers all rose together as free-market, democratic capitalism. That economic stability and alignment feels to be breaking down.

One small example of how it unravels is the UK’s decaying energy transmission Grid. Unlike most nations – which see energy transmission as a strategic state imperative – the UK has made it a private monopoly decades ago. In the grand scheme the Grid is one small but critical component of a struggling state. It’s been roundly criticised for its inefficiencies, under-investment and how much money its private capital have extracted over the decades.

A Labour think-tank has produced a highly critical report and plan that few people will ever bother to read. I listened to a Grid spokesperson defend it for investing millions of pounds, while bringing private-skills, management and cost controls to the public sector, thus ensuring energy security. Even the studio host wasn’t listening as she read unconvincingly from her “talking-points”. The UK’s Grid is unlikely to ever make the top of the nation’s priority repair list – in 20-years time it will still be held together with string and sticky-backed plasters.

Remind me which nation has the highest energy costs – a major factor in the UK’s dismal growth? Why do private investors love it? Because they own a AAA risk and garner BBB returns in the form of dividends! (That’s the basis of all Private Capital infrastructure investment.) The UK’s experiment of privatising state utilities 4 decades ago has been an unmitigated disaster – but is a great illustration of the long-term consequences of short-term political decisions.

The market doesn’t particularly care about the long-term. It’s trying to figure out the immediate market risks, like: How much can bond yields rise without overturning equities? How can the USA afford its debt if there is a buyer-strike? How can the UK prioritise spending when its clearly broke?

Thus, the headlines markets pay attention to are all about what the fear of inflation, interest rates, escalating conflict risks, strained national finances, and an energy/supply chain crisis mean for prices now.  The market, of course, is not clever or intelligent – it’s just a voting machine focused on the here and now.

There is much less forward thinking on the price consequences of the much larger threats. What will be the consequences of the ongoing geopolitical hegemonic shift towards China on global trade, growth, wealth and prosperity. How will society address the rising demographic crisis, climate change, or what increasing social unrest and instability might mean?

For society, the looming crisis feels pretty fundamental. It’s about progressive disappointments. These are magnified by the consequences of decades of compounding political economic failure – by ruling parties of all political hues. That’s seen very clearly in the UK, where the current government is anxiously trying to balance the books, and is struggling to stretch a very limited budget to paper over the cracks in housing, the failing privatised utilities, exhausted infrastructure, overwhelmed law and order, ineffective defence, a health service that threatens to consume the nation, and a welfare bill that’s out of control. None of these crises were created overnight – they are each the consequence of decades of short-term politics failing to address long-term issues.

If only it was as simple as Guns or Butter.

Layer on the fears of the electorate to the threat of pension raids, rising middle class unemployment, wealth-inequality and the need to blame somebody, and you have the classic ingredients for the swing towards populist politics which promises to fix everything overnight because it’s always someone’s else’s fault. Er no… if you want someone to blame… look in the mirror.

We’re seeing exactly how that plays out in the USA.

Donald Trump is the Index Case of Populism. He came to power on the back of his millions of core MAGA voters who passionately believed his promise he would restore US jobs and renew prosperity – addressing their disappointments on being “left-behind” by globalisation. His programme put the blame for that on how the USA had embraced unfair competition, promoted its economic rivals through loaded trade agreements, and argued strongly for right-wing traditional values to re-establish the USA’s vitality and critically resilience. There was the convenient enemy of “immigration” to blame for crime and societal decline. He was enabled by an incompetent, gerontocratic Democrat Party which failed to grasp how sentiment shifted as the divisions between rust-belt and coast grew. Trump successfully railed against the “swamp” of the entrenched political elites (of both parties) as the problem behind America’s internal slump.

He proposed dramatic solutions which have been enthusiastically embraced across Europe’s far-right populist fringe. Black-shorted balaclava numpties genuinely believe the Lifeboat men protecting illegal immigrants from drowning are left-wing, sharia-beholden, woke-worshipping, servants of socialist Europe. They think stopping the boats will lead to prosperity for all. Doh!

Reality intrudes. Trumpism, MAGA, Reform… aren’t creating jobs or wealth. The promises are undeliverable. Politics will degenerate into claim and counterclaim and breaks down. Democracy becomes a commodity. The strong emerge. The opposition go to the Gulag. The weak do what they are told. Dystopia here we come…. Yay!

Trump’s “revolution” is struggling. Tariffs and America First policies have not delivered reindustrialisation. He’s embraced the billionaires – who are wholly unaligned with MAGA. He’s plunged the USA into a new forever War in Iran. The voters will decide.

However, the critical thing is… Donald J Trump is not the problem. He’s a symptom of a world that was approaching a deal of trouble with or without him.

My own views on Trump are more complex than you may think. I give him credit for the perception of the crisis at the heart of America, but rather than seek to solve it I reckon he saw it primarily as a business opportunity. No man has ever monetised the Presidency so effectively.

Trump is interesting. A narcissist who defends free speech by denying it to any who disagree with him, who believes democracy is democratic only when it votes with him, and although there is more culture in the world’s smallest pot of yogurt, considers himself an arbiter of good taste. Of course, we are right to shake our heads in disbelief at the multiple things he’s done to diminish America – from The Board of Peace, Meme-Coins, Pardon-Markets, Naked Corruption, His Cabinet, The Big Beautiful etc, etc. But America voted for him, and a significant number will continue to do so.

But what Trump has done is accelerate the moment when the unpayable bills and divide between the enormous wealth and poverty of the West become due. And that’s not just in America, but across Europe and UK as the consequences bite.

There is very little being said about national resilience – which may become the most important investment factor as a looming sovereign debt crisis and populist political failure coalesce.

Out of time and back to the day job…

Bill Blain

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

Meanwhile, don’t forget about my new book: The Battle for Hamble

You can read a review on the Society of Professional Economist’s website here.