Blain’s Morning Porridge April 29^th, 2026 – Malta, The King, The Gulf and whatever next….

“America’s words carry weight and meaning… the actions of this great nation matter even more…”

Interesting times indeed. Mr Market seldom looks beyond the end of his own nose, but the World is looking increasingly fraxious these days. Big nations have ever bigger problems. Maybe smaller ones will do better? The end of strong states often results in smaller nations competing harder to thrive, leading to competitive frictions!

LINK TO PODCAST

Apologies for the lack of Morning Porridge the last few days. I’ve been in Malta – a mix of business and pleasure. Having withstood two incredible sieges in the last 500 years, Malta resonates with lessons from history – and history informs markets (if they are prepared to listen.)

What has Malta got to do with markets you wonder? Little and everything. Today the market is trading small wave to small wave – weighing up the implications of what the solved Fed Head impasse means, disappointing OpenAI numbers mean for the change AI promises to enact across the whole economy, or wondering what the next Trump outburst might do to sentiment. They pay less attention to developing situations, like what the long-term consequences of the exit of the UAE from OPEC and the rift between the Gulf States and Saudi might ultimately mean.

Watch events carefully. They highlight how the world is changing and evolving – not necessarily to the advantage of the powers in positions of apparent strength. NATO has been the cornerstone of the most successful defence and economic alliance of all time. OPEC has dominated energy markets as a Cartel threat for over 50 years. All things change… and to figure out how…

Take Malta as an example.

• In 1565 Europe was riven between warring powers, leaving the Knights of St John on the Island to stand alone against the mighty Ottoman Sultan who saw the strategic importance of the Island, invading with over 20,000 crack troops. Fighting with determination the outnumbered knights held out long enough for relief, less than 20% of them surviving. European powers were swift to take credit. In the map corridor of the Sistine Chapel in Rome’s are two battle scenes – the Battle of Lepanto in 1572 and the Siege of Malta – representing the pivotal moments the Pope claimed had reversed the Moslem threat to Europe. (After that, European powers got back to the main business of challenging each other to be regional hegemon.)
• In 1940-43 Britain stood against the Fascist Hordes of Germany and Italy. Malta was Britain’s bastion in the Mediterranean – it’s people choosing to hold out against the odds, short of food and particularly fuel for its defending Hurricanes and Spitfires. It became the most heavily bombed place on the planet – but the Maltese fought on. Through the resilience of the people supporting the defenders, Malta based Royal Navy subs and RAF planes were sinking up to 60% of the supplies destined for Rommel in North Africa. In 1942 (some five months after the Americans turned up 2 years late to WW2), King George awarded the whole Island the George Cross for its bravery. Today the Cross is incorporated on the Island’s flag.

Malta is reinventing itself as part of the EU, planning for sustainable tourism, commerce and finance to maintain and build its economic fortifications in this increasing fraxious world. What immediately impressed me is how clean and tidy it all is – because the govt pays people to pick up litter and they take pride in their island Nation. If you haven’t visited Malta – make time. There are lessons to be learnt.

I’m increasingly coming to the view that, for multiple reasons, big states just don’t work. They are too complex and riven with resource allocation impossibilities and politically small people. Small nations can do better. And the history of small states withstanding powerful ones is particularly resonant today. (And yes, I am thinking where Scotland sits in that…)

Which leads us to DC….

If you were to congratulate King Charles on the excellent job he did last night in DC, he’d brush it off with a jest that his 7 decades of training in how to wield soft-power leaves him singularly unqualified and far too inexperienced to comment. Don’t you wish he were a commoner, and able to bring his leadership skills to UK politics? Probably not – we’d soon find things to complain about.

Yesterday King Charles gave a masterclass in tact and diplomacy – delivering subtle barbed comments that would have left any half-informed despot bristling. Trump and his minions chose to hear what they wanted to hear about Britain re-arming. There are none so deaf as those who will not listen. They seemed to think they’re dealing with Britain’s leader, not understanding the King was delivering No 10 Downing Street’s political message with skill, humour and effect. Some of the lines were brilliant. The Democrat opposition loved it.

But who was it really aimed at?

Not Trump. It was directed at America. Not through fake news, media manipulation and lies, or furious tub-thumping, but through well-chosen words delivered with meaning. Between the lines he told America:

• Friends and allies count, reminding the US of its duty to Ukraine in terms of democracy, freedom, stability and the strength of common, united purpose.
• American’s strength is founded in democracy and the stability it brings. Its power as the Arsenal of Freedom is at risk. Grateful nations show love and respect. Autocrats aim to betray you.
• By describing the NATO alliance as “unbreakable” he was warning – “you are in danger of destroying it”, and that something else will emerge.
• The King cited over 160 occasions when the Supreme Court has cited Magna Carta as the reason for the checks and balances to executive power that Trump now ignores.
• While the smiles for Trump’s benefit were a gentle admonition to a dear old chum to respect the traditions that made America great, and not to unravel them – to message to the wider US audience was a clear – get your act together.

It was also a message to Europe. A demonstration of how to the play the game. And a reminder, perhaps, that Europe is a lesser place without the UK – which is delivered as much to Westminster as it is to Brussels!

And in Abu Dhabi…

Meanwhile, the shock of the UAE pulling out of OPEC – a move they say was triggered by the Iran War but has been many years in gestation – points to just how much the interests of the Gulf states are changing. Qatar pulled out of OPEC in 2019 – and the hostility between it and Saudi has been a key factor in simmering Gulf politics since. At present the global economy is under threat from Iran, and we like to assume the Gulf states are closely aligned with Trump’s objectives (whatever these might be) – but, in reality, the Middle East is increasingly divided.

The economic reality is the future prosperity of the UAE is more closely linked to global markets and growth – not the price of Oil. To thrive the smaller states, need the freedom to transact widely, including with the West and the China Block. The UAE’s interests are more aligned with the nascent grouping of BRICS nations than just as a petro-state.

In this, and in so many other things, Trump has little real idea of how the world is evolving. He believes in the old-school power of oil and oil prices. Which is also why his bestie in the region, MBS in Saudi is struggling to pay for its increasingly botched-looking efforts to diversify away from being an Oil-based piggy bank for its large roster of princes. (Credit to MBS for seeing the problem – but he will have to act strategically to stop the Gulf from Balkanising.)

Naturally, Trump is involved. Demonstrating his gift for subtle diplomacy and delicate negotiations (US Readers – Sarcasm Alert), he tried to further feather his claim for a Nobel Peace Prize by brokering down the tensions between Saudi and the UAE on the funding of opposing sides in the Yemen civil war. Naturally, he made a bad situation worse.  Now, the states are all considering where they stand, not just the UAE’s relationships with Moscow and Iran – and with just how much China is pulling its partners’ strings.

If you think a Gulf crisis based on Iran and the Strait of Hormuz is a crisis – figure out how deeper regional instability could make a bad situation much, much worse.

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.