Blain’s Morning Porridge July 24^th, 2026 – The Judder Moment in Oil, AI and the Presidency…

“Regime Change usually leads to chaos.”

The next few months are going to get interesting as markets react to the ongoing mess that is the Gulf, rising oil prices, wobbling stocks, rising bond yields, broken supply chains, and the reassessment of the AI “revolution”. Meanwhile, the US political cycle goes into the Mid-Terms. I would suggest everyone reads Regime Change, the new book on Imperial Trump, to understand what the last 18 months has been about.

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I predict the coming three months will become increasingly “interesting” in the Chinese sense of the word.

There was a clear judder moment yesterday felt around global markets as the scale of the Iran War reversal became clear. It’s a wild fire that won’t stay out. It’s widened to include the Houthis threating the Red Sea choke point, the Bab-el-Mandeb, pushing oil back over $100. Its triggered renewed fears of inflation and supply chain dislocation. Interest rates are now expected to rise – at a time when the driver of the current market strength; the AI infrastructure capital free-for-all looks to be slowing. Stock markets slid and bond yields rose.

That loud bang you heard might have been the AI Bubble popping.

Weaker earnings, soaring Capex, and rising doubts on investment returns and current valuations. Next week’s numbers on revenues and spending from Amazon, Meta and Microsoft will be critical. Folk are beginning to doubt P/E expectations based on fantabulous monetisation expectations. A clear shift in market thinking is underway from how fast the AI sector might expand; towards the real revenues it will generate – it’s the moment someone switches on the lights at the end of a party.

(In yesterday’s Morning Porridge I re-iterated just how overvalued Tesla looks on the speculation on how Robotaxis and Optimus will win in highly competitive new markets. The stock tumbled 15% through y’day. My short is performing nicely.)

As I explained on a call yesterday, there are wider geopolitical risks – the USA is draining its capital markets of liquidity to fund an AI ecosystem that may not be the optimal technical solution the global market is likely to embrace. The key geopolitical driver at present is the China vs US struggle for global hegemonic power and influence.

Wars are economic in nature – the struggle for global hegemonic power isn’t just about carriers and planes, but about who leads in innovation of new tech and therefore dominates markets. The new Chinese AI tech is now demonstrating it’s a direct threat to future US tech dominance – it is just as good, it’s cheaper, and critically… its open-weight meaning data sovereignty remains with the user.

Even as markets struggle to adapt to the suddenly changing mood and sentiment…  President Trump threw dynamite onto the embers of the trade-war fire with a second round of global tariffs on everyone. Remind me who pays tariffs? Exporting nations or domestic consumers? (Clue: it’s a domestic sales tax.) The Iran War has cost north of $60 bln (Hesketh says less… but, really?) The US debt clock is surging towards $40 trillion ($39.6 as I write… where will it be when you read this?) And Trump’s main contribution to the US balance sheet has been a give-away “big beautiful bill” to make millionaires into trillionaires, while the other 99% face higher bills.

Let me step back a moment…

I’ve been reading Regime Change, the bestselling blockbuster on the second Trump Presidency, by Maggie Haberman and Jonathan Swan. (Trump hates her – he refers to her as Maggot – a clear sign they hit the motherlode.) It’s sold over half a million copies in less than a month. It’s a cracker. It doesn’t try to make sense of Trump or provide any deep psychological understanding of his motivations except at the obvious level – like his focus on “retribution” and his desire to be remembered as a great man.

Instead, the book lays out clearly the events of the last 18 months of “Presidency by Whim”. If you are looking for illumination on the in-depth economic analysis of the economic risks, pros and cons of tariffs that must have been undertaken by Trump’s advisors and cabinet – you will be looking in vain. Trump literally woke up in the middle of the night and tweeted them on Truth Social – and then told his “guys” to do it. They did… too fearful of his wrath to argue against them.

The book is subtitled “inside the Imperial Presidency of Donald Trump”. To quote: “His advisors knew he was not receptive to being briefed on harsh realities… More than ever before… he was operating on pure gut instinct.” In an interview with the authors, Trump cited a famous historian who said: “If President Trump is the American Eagle, then William the Conqueror was merely a sparrow.” Trump considers it his valedictory – confirmation he is one of history’s great men. The author traced the line back to South African golfer Gary Player’s caddy!

The book is based on first hand (but unattributed) witness accounts of what actually occurred from within the administration – suggesting the White House leaks like a sieve. It confirms stories we’d only heard as rumours – such as the fisticuffs between Scotty Bessent and Elon Musk. Trump’s only reaction, apparently, was to ask, “who won?”

The book finishes in the myre of the Iran War.

What would it say of today?

Trump is still playing. He is betting he can deflect the increasing electoral hostility and loss of confidence in his administration ahead of the Mid-Terms though action and by roaring loudly – raging to anyone still listening about stolen elections, other nations stealing US jobs, the perfidy of allies that won’t stand with ‘Merica, while creating distrust in the electoral system ahead of the November Mid-terms.

Perhaps Trump’s main advantage now is perhaps how disjointed and uncoordinated the Democrat opposition remains. MAGA (the party once known as the Republicans) is largely unchallenged by clearly electable Democrat candidates. (The reason the Conservative Government of the UK from 2014-2024 was so ineffective was the failure of the Labour Party to effectively oppose them.)

Polymarket says there is an 86% likelihood the Democrats will win Congress, but a 56% probability the Republicans will retain control of the Senate. Trump may be less of a lame duck than many expected.

All of the above will be dismissed by a large number of my Trump-supporting US chums who believe I suffer from Chronic Trump Derangement Syndrome. Maybe. I am told he’s charming in person. He’s an interesting fellow – give him credit for trying to break the mindset of ossified political thinking across America and the West. But weigh that against the naked corruption and dismissal of process, and Trump deserves credit as a wake-up call.

But the bottom line is the US president is a factor for markets, and as they get difficult, you got to be prepared and informed on what might happen next.

Donald Trump – the gift that keeps on giving to market commentors.

Out of time and back to the day job… have a great weekend

Bill Blain

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

Meanwhile, don’t forget about my new book:

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

The Battle For Hamble is a proper grown-up examination of how economies fail: a tale of Greedy Corporates, Bad Planning and Economic Illiteracy. It uses a wholly unnecessary Gravel Quarry in the middle of a prosperous village to illustrate the multiple failings and abdications of responsibility that have created Broken Britain. It’s about bureaucracy, money, exploitation and shareholders vs stakeholders. It’s about social injustice – asking why it’s ok to put 6000 jobs at risk so corporate bosses can reap bigger bonuses! Whether is the Hamble Quarry, HS2 or the abysmal state of UK armed forces due to bad procurement, read the book to understand how its broken process and bureaucratic indifference that is sinking Britain.