Blain’s Morning Porridge April 9^th, 2026: The End of Exceptionalism

“I saw a death-head sticker on a Cadillac.”

There is something deeply unstable underlying current markets. They don’t feel right. Something has changed. What could it be? It’s likely to be how Trump’s misjudgements in Iran and over NATO have reset expectations and accelerated the end of the American Age. The implications are huge.

LINK TO PODCAST

Interesting Global picture this morning. Not much of a ceasefire in the Gulf, but the massive de-escalation rally continues apace. It’s founded on a very unlikely premise – that the World will simple go back to where we were before Feb 28^th and Trump decided to bomb Iran.

You can never go back. Time moves in one direction only. Change is the rule. And this world is changing faster than we think.

Step back from the markets for a second and try to figure out the rhyme and reason of the current moves. It all feels a bit too fervid for me – something has happened and we don’t know what it is. To understand what happens next, we have to understand what’s changed.

I could cite you a thousand reasons to be bearish and far fewer to be ecstatically bullish. Many readers of the Morning Porridge feel much the same sense of angst and stomach churning concern… markets just don’t feel right. They’ve never felt so bearish and unconvinced by the apparently buoyant sentiment.

Consider the following – just a few of the many inconsistencies that dominate current sentiment:

• The global economy has just suffered its biggest shock in decades from Hormuz oil flows which could take months to unravel – but stock markets are touching record levels, even though the ceasefire looks about as solid as a wet Sunday Post.
• Bond yields have risen to reflect rising inflation fears – but stock prices say boom times are coming.
• US vice president JD Vance is in Hungary actively campaigning for Putin sidekick and EU hater Orban, while Trump threatens to pull out of Nato – but markets don’t fear the breakdown of the most beneficial military/economic alliance in history might be a problem?
• Space X is still to get a Starship heavy booster into orbit and no-one knows how to make a space-based data centre work – but the IPO is set to touch $2 trillion and be the biggest on record.

How is it the market happily believes so many impossible things before breakfast?

I think there are many reasons, but they boil down to a couple of minor factors and one big, insurmountable issue – which naturally I shall come to last!

The first factor is Buy-The-Dip mentality – that markets are on a perpetual roll, because if anything ever goes wrong then global central banks will have no option but to step in and bail them out. BTD is now a “Pavlovian” response to any market wobble. It hides underlying weakness – and it is why so many market participants will be caught wrong when the big one inevitably hits.

The smart money rationalises BTD as a very simple relationship – due to the unsustainable levels of national debt “they”, (that is the monetary authorities, government, George Soros et all (delete where applicable)), can’t risk bond markets clapping out. And the only way to keep bond markets trockling along is for markets to be bright and rosy and utterly convinced we are always in the bright, shinny morning of a market rally.

There was a time when you would flee to the relative safety of bond markets if the stock markets looked iffy, but now the connection between falling taxes and unsustainable debt are too strong to completely ignore.

Perversely.. I’m not so worried. I know financially sovereign nations don’t go bust – unless someone does or says something profoundly stupid or daft… Which leads me to my second thematic factor about market madness..  The profundity of stupidity and personality cults.

A few months ago I (half-seriously) wrote about the possibility Trump would decide to punish nations that upset him by selectively defaulting on US Treasury bonds. Yesterday, an American lawyer who keeps his brain under a MAGA hat suggested it’s a serious option Trump is considering. Oh dear. In God and Treasuries we (once) trust(ed).

The issue is the trust we put in the people who dominate the markets.

If you want a good example, read the current take-down of Open-AI head Sam Altman in the New Yorker. This is the man leading the AI revolution. The article is based on interviews with those that new him best, the data scientists who ousted him from OpenAI in 2024 accusing him of misleading them, being careless of AI risks, of being less than honest, power-mad, and manipulative. Read the article and then decide if this is the kind of guy who has our best interests at heart.

Ask yourself the same question about Trump and his cabinet. Taking the USA into an unnecessary war with no clear vision of what winning it would look like has done faith in America no favours. A massive strategic defeat they can’t acknowledge.

That is the thing about the ‘Merican Century. It’s been a story of big, noisy, exciting  personalities who dominated the global picture. They were film-stars, musicians, sportsmen, politicians and businesspeople who exercised soft and real power – the figures who made America exceptional.

Today they still exist – they are as brash, but the ones that matter now belong to the select club of tech-bro billionaires. Musk, Altman, Trump, Theil, Andreesen, Zuckerberg et al demand our focus. They represent a new form of exceptionalism – money and power, not ideas. America is not what it was. Trump has pretty much blown the foundations of America’s real power – its soft cultural power that made us all want to be like them. Not any more.

And this is the big issue – the End of the American Century. The End of the Age of Exceptionalism.

That is the crack in the mirror that Trump’s misadventures in Iran have exposed. The President is lashing out. He blames Nato. Last night he lambasted NATO head Mark Rutte over Europe’s failure to support the USA over Iran – and clearly threatened to pull out of NATO.

Trump thinks he’s doing a deal. Nope. Europe gets it. The divorce papers are probably already in Ursula Von der Layen’s handbag. When Nato breaks – and it will because the trust in what was the most successful military and economic alliance of all time has gone. They might talk reconciliation, but Nato is gone and the world will change very quickly.

I believe that’s why so many of the European investors I speak with as so concerned about the market’s implausible strength. They know something geopolitically huge has happening that changes the basis.

Here’s my outlook for coming months – yes, this could unravel quickly.

• We will see the US AI boom dissipate as it becomes clearer there are alternatives, removing a massive driver from US stocks.
• We will see pushback on American tech as US firms run into European regulatory hurdles and purges.
• There will be pushback from America – prefigured by the way Trump has dissed Europe for not joining him in Iran – even as Europe stops buying American goods.

And the Chinese will smile.

Out of time and back to the day job..

(Don’t forget, my new book – The Battle For Hamble is published today!)

Bill Blain

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