You can’t keep a good market down. New record US levels seem to occur daily. But, why? The underlying picture of the US economy is not weak, but the political structures around it seem to be fraying. What might give and trigger the kind of reversal many expect, or might we get a more fundamental reassessment of what the USA will look like post-Trump?

We live in interesting times. Markets are see-sawing on the strum et drang of events. It’s critical to cut through the noise, and figure where this all might be going. Once events are in motion, they become increasingly difficult to control. Change is in the air.

Nothing beats teaching the next generation of financiers. I had that honour yesterday at Heriot-Watt’s Edinburgh Business School Yesterday where we discussed Markets, Politics and Economics. There were some great questions from my post-grad students – and one: “Is this a correction and should we buy the dip”, is good example of how much has really changed. The answer is – No.

The market is probably overstressing on Trump – but he does make a lot of noise. A bigger danger may be the broader signals and the future of the USA as economic hegemon. At a time when the US Debt clock is spinning so fast you can’t read the numbers, could the USA withstand a Dollar, Treasury and Political Competency Crisis? Let me explain by taking you to the top of a very steep mountain.

Markets fear instability above all else. Financial crashes happen. Spectacular gains are followed by dramatic losses. Market foundations are strong, based on the truth of bond markets. What might happen if investors lose their confidence in bonds?

The nations of the West face crisis: how to fund vital infrastructure and critical defence spending without upsetting bond markets? They are worrying about the wrong things. Time to rethink government spending and how to do it.

Around the globe, businesses are wondering about doing business in the UK – the headlines don’t support it. Uncertainty is contributing to domestic inflation, and the sense things need to change. It could even get worse ahead of a new government – which will still face crisis!

As London grieves we’re not paying much attention to politics and markets – but we should. The outlook is deteriorating. Confidence is declining and will likely get worse if the new government’s lack of awareness and sensitivity continues.