Viktor Orban was a curious beast. A pragmatist and a populist who tried to play off Moscow, Washington and Brussels. Hungary is not yet solved, but it could be a transformational moment for Europe in terms of Populism and Unity.

As the US and Israel attack Iran, confirming the Fire Horse threat of escalating conflict risks, do we also face a second social threat from AI triggering widespread social and wealth-inequality protests? Does 2026 risk becoming a double whammy hit on market sentiment and confidence?

A big question for 2025 is how resilient the US Treasury market will be to tax cuts, spending hikes and the deficit surpassing $40 bln in 2026! Trump is going to slash spending – taking tips from Argentina’s Javier Milei. Will it work – and is it suitable policy? Here in the UK, govt is taking tough decisions, but we are poised at the edge of the rabbit hole as polarisation looks set to dominate!

Its neck and neck in the US election. Trump promises to MAGA through tariffs, autocracy, spending and tax cuts. But the core problem behind increasing polarisation is rising inequality – undermining the fundamentals of the American dream and justice.

Everyone will be watching today’s unfolding internet outage – a dress rehearsal for the opening salvo of the next war? Meanwhile the West is unravelling because of populism – which is fuelled by inequality. No Sh*t Sherlock award to myself for spotting it.

Labour got a landslide, but did not win the UK election – the Tories lost it. The result is not what it appears to be…. The real winner was Reform, and that could have massive future consequences for Markets and the UK economy.

At a time when markets crave stability and uncertainty, the political picture looks increasingly messy. No problem. These things have a habit of resolving themselves faster than we expect. Bear my mantra in mind: “Markets are never as bad as we fear, but seldom as good as we hope.”

The US Stock Market hit a record high on Friday. Yet around the globe the disconnect between euphoric markets and unhappy voters has never been so wide. Markets are still distorted on low-rate expectations, while populism and inequality are rising.

Blain’s Morning Porridge, 17th January 2024: – Davos: Deaf, Dumb [...]

We need to be aware of the consequences of political failure and populism. What’s happening in the Middle East is a warning of how politics go wrong. We should pay close attention.