Halloween is a great time to be scared about markets. They are inconsistent, confused and uncertain, but the reality is even rising interest rates, inflation and trade wars sort themselves out - eventually. The real danger is how much worse bad politics and make a scary situation absolutely frightful.
The news looks bleak. A cataclysm of gloom is set to sink Europe and the UK – but, maybe things aren’t as bad as we think. Good news and a realisation things can get better could stabilize sentiment, and build a recovery base. Maybe?
The world is watching for signs confirming global recession, so naturally markets have rallied (!). Political instability is resolved to be replaced with some bleak truths and spending choices. So.. steady at the wheel, nothing to worry about then?
As we start a new week of dismal markets, depressing political news, rising inflation and lots of what next worries… relax.. the Sun will come up tomorrow. Not so sure about the economy though…
The outlook for markets remains dire.. no worries! But what chance governments, central banks, the economy and growth enablers suddenly turn up the good news and put it all right again…? Are we over-estimating stagflation and recession?
Two simple questions for Central Banks; what was their plan, and what is it now? The consequences of 14 years of monetary experimentation are upon us. From Macro to Micro, Boeing is a sad illustration of the consequences of central bank policy.
Central Banks and Politics will be the dominant theme this week/month/year. Politicians are anxious to show inflation and recession are not their fault. Blame Central Banks! The Politics of Blame has profound consequences for markets.
Macron’s victory has been hailed as a market plus, a win for Europe and common purpose, but it’s likely just a crisis averted, perhaps, for a few more years. Around the globe populism will likely be fanned by inflation, food and energy insecurity and become an increasingly destabilising force on markets.
Populism is a massive threat to markets. Inflation, tax-hikes, petrol costs, poverty, political mismanagement and a host of other failings could further destabilise the West, while markets seem determined to stay euphoric whatever the evidence to the contrary.
As a difficult 1st Quarter-End approaches, markets look fraught, but so do the fundamentals of the Western Free Market Economies – Capitalism needs maintenance and repair work on dishonest politics, immoral companies and broken bureaucracies.
